Investing.com - According to Morgan Stanley, artificial intelligence is fundamentally changing the demand for software infrastructure. Providers of data and cloud platforms in particular could benefit from this to an above-average extent.
Following an industry conference, analyst Sanjit Singh was optimistic for parts of the sector. He left the event "with a better feeling for the growth prospects" in the infrastructure software sector, he wrote in a study published on Friday. Companies with large platforms in particular would have good cards - their systems are too complex to simply recreate with the help of AI programming agents.
At the conference, the managers of leading providers convincingly explained why their business models are hardly threatened by possible displacement by AI. The decisive factors are "the size and complexity of their infrastructure platforms" and the high overall costs for customers to develop comparable systems themselves, Morgan Stanley said.
According to the analysts, the increasing use of multiple cloud providers also speaks in favor of the established platforms. Their multicloud architecture provides the "availability and resilience" required for business-critical applications.
Investors should therefore focus on software companies "that provide things that AI agents will consume in large quantities", says Singh. Solutions for data infrastructure and so-called observability software, which companies use to monitor and analyze their systems, are particularly in demand.
Morgan Stanley names several well-known names from the infrastructure segment as the most promising beneficiaries. These include Snowflake (NYSE:SNOW), Datadog (NASDAQ:DDOG), Akamai (NASDAQ:AKAM) and Jfrog (NASDAQ:FROG). Snowflake in particular impressed at the conference. The management showed a "strong sense of urgency" in dealing with the changes brought about by AI, the analysts wrote.
While investors are still discussing the long-term consequences of a world with AI agents, Morgan Stanley already sees clear trends. "The outperformers in 2026 will be those companies that are linked to the most important IT priorities in the current environment," says Singh. These include, above all, accelerated cloud migrations, new applications and continued high software development activity.
After the conference, Morgan Stanley therefore named $SNOW (+0 %) , $AKAM (+0,06 %) , $DDOG (-0,27 %) and $FROG (+1,44 %) as the most important investment ideas in the sector. This is followed by the database specialist MongoDB (NASDAQ:MDB).
