第二季度基础设施软件预览：AI最大受益者及首选标的

SNOW, FROG, MDB, and DTPrice Objective Change Sectorthoughts:InfraSofttobenefitmostfromAl AmericasInfrastructureSoftware beneficiary of the four software sectors we cover (the others being applications, vertical,and cybersecurity). After conducting industry checks and analyzing data signals, we Koji Ikeda, CFAResearch AnalystBofAS emphasize that demand is accelerating for thebest infrastructure software vendors.Weexpect Al-driven consumption to show up in usage and bookings, and we think thecompanies that show it will see their stocks re-rate. Our top picks are Datadog(DDOG), Snowflake (SNOW),JFrog (FROG),where key growth metrics continueaccelerating,along with MongoDB (MDB) and Dynatrace (DT). On the other side, Wesee the highest risk of downward estimate revisions for C3.ai (Al) and PagerDuty (PD)given transitions across mgmt., go-to-market, and pricing models.Best growth acceleration setups: DDOG, SNOW, FROG koji.ikeda@bofa.comGeorge McGreehanResearch AnalystBofAS +1 415 913 4315george.mcgreehan@bofa.com into 2Q.For DDOG, the key metric is total revenue growth, and a 3% beat to the guide midpoint (vs. 5.3% last quarter) implies +34% y/y growth, accelerating from +32%3% beat to the guide midpoint (vs. 5.5% last quarter) implies +34% y/y growth(BofA/Street +30%),flat with 1Q but on a much tougher comp (+32% vs. +26%).ForFROG, the key metric is Cloud revenue growth, and 2Q typically seesmore new Cloudrevenue than 1Q. But for simplicity, holding new Cloud revenue flat with 1Q would stillimply +54% y/y growth, up from +50% (BofA/Street +34%/+41%).Most likelytohaveastrongerAl beneficiarystory:MDB Summary of Price Objective changes Rating The biggest question we've heard since MDB's 1Q print is when it will prove out as anAl beneficiary. We think it will happen this quarter.MDB needs to deliver 2Q Atlas growth of at least +28% y/y (BofA/Street +26%), guide 3Q Atlas to at least +26%, andsignal it's becoming more entrenched in the Al ecosystem. We expect all three. We think DT, in the same attractive observability category as DDOG, delivers on its growth acceleration promise this quarter, and shares re-rate post-print. DT is alreadymost consumption vendors-means usage is slow to hit the financials. We think thatchanges this quarter. The metric to watch: CC subscription revenue growth, where anacceleration from +16% y/y would likely be the catalyst (BofA/Street +15%) RaisingPOsonstrongerdemandandmultipleexpansionThe infrastructure software sector is down 6.0% YTD (vs.+9.2% NASDAQ),recovering from -30% earlier this year without significant upside to revenue or FCF estimates-implying group multiple expansion. Given accelerating demand across our top picks andtaking into consideration the risks highlighted for C3.ai and PagerDuty, we raise POsacross much of our coverage (Exhibit 1). BofA Securities does and seeks to do business with issuers covered in its researchreports. As a result, investors should be aware that the firm may have a conflict ofinterest that could affect the objectivity of this report. Investors should consider thisreport as only a single factor in making their investment decision.Refer to important disclosures on page 24 to 26.Analyst Certification on page 22.PriceObjectiveBasis/Riskonpage19. Six charts heading into the 2Qinfrastructure software earnings cycleExhibit 2: Infra group is down 6% YTD.Best YTD performance comesExhibit 3:Weforecast AMPL revenue to accelerate by 170bps in 2026 from DDOG 88% YTD and TWLO37%, while the relative worst are PD,Al, and TEAM down 25%+Stock performance by software group and time period Summary of ratings, and PO changesPlease see each company section for a more detailed explanation on price objective (PO) changes.Exhibit 8: We raise our Price Objectives for AMPL, DDOG, DT, FROG, GTLB, PD, and SNOW Summary of Ratings, Price Objective, and Valuation methodology Infrastructuree software comp sheet Exhibit 9: The infrastructure software comp group is trading at 5.5x EV/CY27E revenueInfrastructure software comp set revisions, and BofA vs. StreetAl: Strong execution on turnaround strategy needed Maintain Underperform.$8 PO implies 7% downside.What matters:Establishing a predictable multi-quarterbeat-and-raise cadence We think C3.ai needs to establish a more predictable beat-and-raise cadence to drive better investor sentiment because of all the changes it announced over the past fewquarters (CEO transitions, workforce reductions, etc.). The key metric to watch that coulddrive better sentiment is total revenue, where we/Street model $52.1/52.2mnforF1Q,or (25.9%)/(25.7%) y/y decline. A strong F1Q total revenue beat and a healthy FY27 totalrevenue guidance raise is likely necessary to be an upside catalyst, especially consideringwe/Street is forecasting FY27 total revenue to decline by 10%, which is well below theinfrastructure software peer average of +15% (CY27E) growth. We think the business isstill facing a fair amount of execution risks a