Piper Sandler Names Tyler Tech, Procore, and Autodesk as Top Industrial Software Picks

Investment bank Piper Sandler has initiated coverage on three industrial software companies with Overweight ratings, identifying them as high-quality assets poised to navigate current market challenges. The firm highlighted Tyler Technologies (TYL), Procore Technologies (PCOR), and Autodesk (ADSK) for their defensive characteristics and insulation from disruption.

A Bifurcated Software Market

According to a note from Piper Sandler, the software market is experiencing a bifurcation between clear winners and losers. The firm believes companies that offer mission-critical workflows, possess deep domain expertise, and leverage proprietary data are best positioned to outperform.

These attributes, combined with high switching costs, create relative insulation from competitive disruption, including from emerging AI technologies, the analysts noted. This defensibility forms the core of the firm's investment thesis for its top picks.

Overweight-Rated Stocks

Piper Sandler detailed its rationale and price targets for each company, emphasizing their entrenched market positions:

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• Tyler Technologies (TYL): Rated Overweight with a $450 price target. The firm views TYL's focus on the public sector as highly defensive, with its software deeply embedded in government and school administrative processes. Piper Sandler cited ongoing cloud migration and cross-sell opportunities as further tailwinds.
• Procore Technologies (PCOR): Maintained at Overweight with a $68 price target. Piper Sandler pointed to the large, under-digitized construction market and Procore's network effects as key growth drivers. The firm sees a path to revenue acceleration and margin expansion in fiscal year 2026.
• Autodesk, Inc. (ADSK): Rated Overweight with an adjusted price target of $300. The analysis highlighted Autodesk's powerful franchise in design and engineering software, supported by a successful shift toward flexible subscriptions that should drive durable recurring revenue.

Outlook and AI Resilience

A common theme in Piper Sandler's analysis is the defensibility of these platforms against artificial intelligence. For companies like Tyler, the firm expects AI to be "more complementary than existential" to its platform.

For Procore and Autodesk, their system-of-record positions and vast stores of proprietary project and design data provide valuable context that insulates them from disruption. Piper Sandler believes this proprietary data will be a crucial asset going forward.