AI Software Focus Shifts to ROI, Creating Clear Winners, Oppenheimer Says

The initial experimental phase of enterprise artificial intelligence is giving way to a focus on measurable business outcomes, creating a new set of winners and losers in the software sector, according to a research note from Oppenheimer. The firm states that corporate spending on AI is becoming more disciplined as the technology transitions into a recurring operating expense, subject to the same scrutiny as other capital investments.

The ROI Imperative

According to Oppenheimer, Chief Financial Officers are now evaluating AI investments alongside labor costs and demanding a clear return on investment (ROI). This marks a significant shift from the early days of AI adoption, which were characterized by experimentation and adoption metrics. Investors are now placing greater scrutiny on the ability of software vendors to convert AI adoption into sustainable growth and profits.

The firm sees the most favorable setup for system-of-record vendors and companies using seat-plus-consumption pricing models. This structure combines defensible customer relationships with direct financial upside from increased AI usage. Several major players, including Microsoft (NASDAQ:MSFT), Oracle (NYSE:ORCL), Salesforce (NYSE:CRM), and ServiceNow (NYSE:NOW), have already established AI-related businesses generating over $1 billion, while Workday (NASDAQ:WDAY) is reporting strong AI attach rates.

Oppenheimer's Top Picks and Cautions

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Oppenheimer identified several companies it believes are best positioned to capitalize on this market evolution. The firm's top picks include:

• Microsoft (MSFT): Cited for its accelerating platform demand, disciplined capital allocation, and unmatched distribution across its massive installed base.
• ServiceNow (NOW): Highlighted for its combination of best-in-class growth, cash flow generation, and exposure to durable automation and security tailwinds.
• Braze (BRZE): Noted as offering one of the most attractive risk-reward profiles as a system-of-record for customer engagement and profitable growth.

Conversely, the firm recommended avoiding certain stocks. Oppenheimer flagged Figma (FIG), noting that while its execution remains strong, growth could moderate as the effects of pricing actions fade. Its premium valuation creates pressure to sustain significant outperformance. The firm also expressed caution on SoundHound AI (NASDAQ:SOUN), citing an unclear path to profitability, reliance on M&A to meet guidance, and elevated stock-based compensation in competitive end markets.