AI Is Splitting Software Into Winners and Losers, Citi’s Tyler Radke Says

Tyler Radke, Citi’s co-head of US software equity research, said AI is benefiting some software companies while pressuring others, expecting Microsoft’s revenue growth to top 20% while Adobe faces pressure as AI projects absorb corporate budgets. He said AI is lifting Microsoft, Palantir and cloud-data company Snowflake, while Adobe and smaller application vendors are squeezed as IT budgets shift toward AI. Radke pointed to Microsoft’s Office priced under $100 a month with security and its Copilot AI assistant bundled in, compared with rivals charging hundreds monthly; Microsoft’s revenue grew 18% in the quarter ended June 30. Salesforce’s Tuesday agreement to buy Braze for $47.50 per share in cash was a fresh example of consolidation among pressured software makers.