Bank of America signals shift in software sector as AI reshapes outlook

Bank of America has updated its outlook on the infrastructure software sector, upgrading Twilio to “Buy” with a price target of $190 due to its strong position in AI-driven voice and messaging infrastructure. Conversely, GitLab was downgraded to “Neutral” with its price target cut to $27 due to slowing revenue growth, increased competition from AI startups, and execution challenges. The bank highlights that AI is rapidly transforming competitive dynamics and investor expectations within the software sector, requiring companies to demonstrate accelerating revenue growth and improved profitability to justify premium valuations.

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