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Major Software Providers Poised for Quarterly Beats Amid 'Bullish' Reseller Feedback, RBC Says

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Major Software Providers Poised for Quarterly Beats Amid 'Bullish' Reseller Feedback, RBC Says

Several major software companies are likely to top expectations for their upcoming quarterly financial results amid an "incrementally more optimistic" feedback from resellers and other factors, RBC Capital Markets said in a note e-mailed Friday.

The brokerage raised its price targets for 12 of the 14 software providers in its sector coverage, including CrowdStrike (CRWD) and Snowflake (SNOW), which it tagged as its "favorite growth idea." RBC expects both Autodesk (ADSK) and CrowdStrike, in particular, to raise their respectively financial outlooks.

"Our recent checks and on-quarter results from our (artificial intelligence), cyber, infra and data coverage leave us more optimistic as we head into the (second half of the year), with upside to consensus estimates now appearing more likely," Matthew Hedberg, RBC's head of global technology, internet, media and telecom research, said in a note to clients.

"Our off-(quarter) cyber checks were particularly bullish, as we found resellers incrementally more optimistic regarding recent results and the potential for a strong (second half)," Hedberg wrote.

The brokerage raised its price target on the Snowflake stock to $372 from $313. "We continue to believe Snowflake is one of the few software companies benefiting directly from AI-readiness as we remain positively biased on shares," Hedberg said.

RBC revised its price target for CrowdStrike's shares to $256 from $188.75. The brokerage tagged the company as a "top (long-term) idea and category leader."

"Following another round of bullish reseller checks, we look for another strong beat/raise quarter (for CrowdStrike)," Hedberg said. "While we think demand trends remain very healthy and assume nice upside to (second-quarter) estimates, the (short-term) setup is trickier, as CrowdStrike has higher company-specific expectations and valuation (versus) peers."

While RBC maintained its $305 price target on the Autodesk stock, Hedberg described the company's setup as "favorable coming off a strong beat-and-raise quarter."

"We believe (fiscal 2027) guidance has an opportunity to move slightly higher this quarter and over (the second half)," Hedberg wrote. "We continue to like design and vertical software ideas like (Autodesk), as we believe they are less prone to AI headwinds and could start to see AI tailwinds due to proprietary data moats."

Citing "peer-multiple expansion," RBC also raised its price targets for GitLab (GTLB), Okta (OKTA), Palo Alto Networks (PANW), SailPoint (SAIL), among other names. It maintained its price target on the Zscaler (ZS) stock at $200.

Price: $217.71, Change: $-7.82, Percent Change: -3.47%

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