“Looking ahead, we forecast continuing revenue acceleration in Q3 in software with 9.9% YoY growth up from 9.5% in Q2, with 2027 to accelerate to 10.6%.”
Across the different segments, BofA has ‘buy’ ratings on IONOS IOSn.DE, Nemetschek NEKG.DE, Planisware PLNW.PA, Sage SGE.L, SAP SAPG.DE, TeamViewer TMV.DE, Temenos TEMN.S, Capgemini CAPP.PA, Computacenter CCC.L, Netcompany NETCG.CO, HBX Group HBX.MC, Sabre SABR.O, Adyen ADYEN.AS, Klarna KLAR.N, Remitly RELY.O, and Wise WISEa.L.
European software stocks have had a bumpy ride over the last 18 months as investor sentiment around possible AI disruption risk lingers, even as second quarter results looked decent on the whole.
“Bottom up, Q2 was encouraging,” says Bank of America Global Research.
“55% of companies beat on revenue, with increasing evidence of AI monetization across software or IT services, while disintermediation concerns around payments have somewhat subsided.”
Investors remain fearful about AI displacement risk, with concerns about lower barriers to entry, increased competition, budget erosion and broader loss of market leadership, BofA notes, even though signs of the impact are yet to emerge.
“Overall, there was no evidence of incremental disruption or competition in Q2s,” BofA writes.
