Jefferies has named three European software stocks it prefers within its coverage, spotlighting firms that are making measurable headway in converting AI-related demand into revenue. While the broker emphasizes tangible progress at these companies, it also warned that the upcoming second-quarter earnings season is unlikely to be a major market catalyst for the group and pointed to heightened uncertainty for software names as AI developments continue to reshape the landscape.
All three picks carry Buy ratings from Jefferies and present different timelines for when AI initiatives are likely to materialize as clearer financial outcomes.
Computacenter
Jefferies ranks Computacenter as its top pick among European software-exposed companies. The brokerage highlighted the company’s expanding footprint in the United States and strengthening ties with hyperscaler customers that are making substantial investments in AI infrastructure. Management’s advancement toward medium-term efficiency targets was cited as a potential driver of margin expansion, suggesting operational leverage as AI spending ramps up among its clients. Jefferies raised its price target to 5,000 pence while maintaining a Buy rating, describing Computacenter as the strongest "picks and shovels" play on AI-related spending within the broker’s coverage universe.
Sage
Jefferies contrasted Sage’s approach with peers by noting that it has moved ahead in translating AI capabilities into actual revenue growth. The broker emphasized that Sage is monetizing new AI features through premiumed bundle pricing rather than distributing those features for free, and pointed to four consecutive quarters of accelerating growth alongside improved customer retention metrics. Although Jefferies trimmed its price target for Sage, it retained the stock as a favored sector name, arguing that the company is both the fastest growing among its domestic peers and remains attractively valued relative to them.
SAP
Jefferies described SAP as the most aggressive of the three in pivoting to an "AI-first" strategy, deploying new tools and incentivizing adoption with measures that include providing free agents to customers. The brokerage cautioned that these adoption incentives delay revenue recognition, and therefore expects the clearer financial benefits of SAP’s transformation to be more visible in 2027 rather than in 2026. Jefferies lowered its price target for SAP on the basis of weaker peer valuations but maintained a Buy rating, arguing that SAP’s strategic positioning merits recognition even though near-term results are unlikely to act as a substantial catalyst.
Across its coverage, Jefferies flagged that AI-related disruptions introduce a higher degree of uncertainty for software names, which tempers expectations that an imminent quarterly reporting cycle will change investor sentiment materially. The brokerage’s selections reflect a mix of near-term operational improvements and longer-term strategic shifts toward AI monetization, with different companies expected to show financial payoff on different timelines.
Investors and market participants should weigh the distinction between companies converting AI features into direct revenue today versus those still in the investment and adoption phase where recognition of gains may lag.