Story
Piper Sandler Sees Up to 75% AI Cost Savings from Key Software Stocks
Summary
Investment bank Piper Sandler identified Atlassian, Elastic, GitLab, MongoDB, and Snowflake as key beneficiaries of enterprises' push to control AI spending. The firm projects these software platforms can help cut AI token usage costs by 50% to 75%.
Piper Sandler has identified five infrastructure software companies poised to benefit as enterprises seek to control skyrocketing artificial intelligence costs. In a note to clients, the investment bank's analysts said these firms can help clients reduce AI model-related expenses, known as token usage, by 50% to 75%.
The AI Efficiency Dilemma
Analysts led by Rob Owens highlighted a growing concern among businesses regarding the return on investment (ROI) from AI spending. While the raw cost of individual AI tokens has fallen, Piper Sandler noted that the improved reasoning capabilities of newer models have caused overall token consumption to "skyrocket."
This trend has reportedly prompted a strategic shift away from broad-based AI usage toward more cost-effective and focused applications. According to the note, this creates "a critical window" for software providers that can improve AI efficiency.
Key Software Beneficiaries
Piper Sandler named five companies it believes are well-positioned to capitalize on this trend by leveraging the proprietary data already residing on their platforms:
Ad- Atlassian (TEAM)
- Elastic (ESTC)
- GitLab (GTLB)
- MongoDB (MDB)
- Snowflake (SNOW)
According to the report, these platforms can create a "context layer" that makes AI agents "significantly more accurate and efficient while slashing token usage costs." This allows enterprises to scale AI adoption "without a linear increase in costs."
Investor Takeaway
Piper Sandler views this as a "compelling incremental growth opportunity" for the identified software vendors, who can price these context layers based on consumption. The analysts also argue that providing this efficiency layer strengthens the companies' long-term competitive advantages, or "moats."
The investment bank stated that conversations with management teams and channel partners have confirmed that organizations are increasingly looking to their existing software to make AI operations more efficient.
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