US Software Refresh - AI Debates and 8 Conviction Overweights

Research evidence excerpt

US Software Refresh - AI Debates and 8 Conviction Overweights

Foundation

July 26, 2026 03:00 PM GMT

Morgan Stanley & Co. International plc+MSoftware Snippets | Europe George W Webb

Equity Analyst

US Software Refresh - AI George.Webb@morganstanley.comMark Hyatt +44 20 7425-2686

Mark.Hyatt@morganstanley.com +44 20 7677-3663

Debates and 8 Conviction William Richards

Research Associate

William.Richards1@morganstanley.com +44 20 7425-0269

Overweights

Technology - Software & Services

Europe

Important events in the world of Software & Services in the Industry View In-Line

week ahead, and key MS research / stories from the past week.

Key Takeaways

US Software: The Moat & The Journey (*MS Research*, #Software)

SAP: CCB Matters More (#SAP)

European Software & Services: What's happened so far in 2Q earnings? (#RELX,

#Dassault Systemes, #Temenos, #Tieto)

Software-focused private equity firm Francisco Partners raises $21bn across two

funds (#Software, #IT Services)

IONOS: Improving Growth Formula - Raising Growth Forecasts (*MS Research*,

#IONOS)

1) US Software: The Moat & The Journey - Assessing Software Durability +

Growth in the Age of AI (*MS Research*, #Software): Head of US Software Equity

Research, Adam Wood, assumed coverage of several large-cap software stocks this

week, with the US software team publishing a key insight report. Adam and team

highlighted that the software industry is maturing, but that they believe the market

has become too negative on the group. They also flag that software tends to follow

a buy-then-build cycle. We are in the build phase today with infra & cyber already

benefitting, while applications remain a later cycle play. The report also covers a

number of key AI debates impacting the software sector; 1) Where does AI value