The software industry is poised for significant transformation, driven by advancements in artificial intelligence (AI) and cloud technologies. Goldman Sachs has recently launched its 2026 forecast for global software leaders, presenting a mix of top investment picks and challenges ahead for some major players. Based on their analysis, three companies stand out as strong buys: Microsoft, Oracle, and ServiceNow, while others face hurdles amid competition and cost pressures.
Microsoft ($MSFT): Dominating the Cloud Market
Goldman Sachs has given Microsoft its highest conviction buy rating due to its unrivaled presence in the cloud computing industry. The growth of Azure, Microsoft’s cloud platform, is projected to escalate significantly by 2026, thanks to its robust operational scale and strategic market positioning.
Microsoft continues to innovate and expand its capabilities in AI-backed infrastructures, cementing its position as a leader in the ‘AI-driven workflow decade.’ Investors are optimistic about the company’s ability to protect profit margins while maintaining consistent growth. For Microsoft Azure solutions tailored to your needs or for small businesses, explore the official Microsoft Azure website.
Oracle ($ORCL): A Profitable Recovery in Sight
Oracle has caught the attention of Goldman Sachs analysts with its improving financial visibility and emphasis on AI-enhanced cloud infrastructure. After facing challenges in recent years, Oracle is expected to see a recovery in profit margins as it rolls out additional data center facilities throughout 2026. The company is also strengthening its role in the AI-powered cloud market, positioning itself as one of the key players driving innovation in the enterprise tech space.
If you’re interested in how Oracle’s cloud infrastructure solutions could help your business, check out Oracle Cloud Infrastructure.
ServiceNow ($NOW): Benefiting from Agent Orchestration
Another top pick is ServiceNow, recognized for its competitive edge in agent orchestration and workflow automation. As organizations pivot towards building smarter, AI-enabled operations, ServiceNow’s focus on enterprise workflow solutions and expansions into customer relationship management (CRM) and enterprise resource planning (ERP) make it a unique contender for growth.
This robust growth strategy has positioned the company to benefit from long-term AI adoption trends that are reshaping the IT and tech landscape.
Challenges for Adobe and Datadog
While optimism surrounds Microsoft, Oracle, and ServiceNow, other software giants like Adobe and Datadog have received Sell ratings from Goldman Sachs. For Adobe, pricing pressures and increased competition in the creative software market are posing challenges, particularly at the lower price points where growth potential is increasingly concentrated. Similarly, Datadog faces competitive threats and heightened scrutiny from cost-conscious customers in the cloud observability and monitoring space.
The Decade of AI and What It Means for Investors
Goldman Sachs projects that the next five to ten years will be critical for companies adopting AI-driven workflows. However, only a select few will succeed in translating AI advances into sustainable profit growth. Key questions remain around balancing infrastructure spending with delivering consistent returns to shareholders.
Looking for cloud and AI-driven solutions for your personal or business needs? Check out the top-performing technologies in the field to stay ahead of the innovation curve.
