Piper Sandler has outlined its preferred equities across three focal technology subsectors, singling out companies the firm views as best positioned given recent demand dynamics and stability in key growth metrics.
The analysis is divided into Security & Infrastructure Software, Digital Infrastructure & Connectivity Software, and Enterprise Software - Platform & Apps. For each area Piper Sandler highlighted a group of stocks based on recent performance trends and the firm's view of fundamental momentum.
Security & Infrastructure Software
Piper Sandler reports that security-focused names delivered another robust month, with the average security stock up almost 50% over the past three months. The firm warns, however, that the market setup may become more complicated after that sharp rally. Within this category Piper Sandler lists MongoDB (NASDAQ:MDB), Atlassian (NASDAQ:TEAM), Varonis Systems (NASDAQ:VRNS), Snowflake (NYSE:SNOW), and Palo Alto Networks (NASDAQ:PANW) as its top ideas.
The firm says that companies able to pair the notable price appreciation with equally compelling fundamental results should continue to perform. Piper Sandler attributes much of the recent strength to optimism over how demand is evolving in the period following Mythos.
Digital Infrastructure & Connectivity Software
June saw a rotation back toward software from hardware, the report notes, though investor interest remains highest in narratives most exposed to AI. Piper Sandler observes that valuation multiples have moved toward levels seen before the Cloud Era over recent months, while growth and net revenue retention rates have shown resilience.
Ahead of upcoming quarterly reports the firm reiterated Axon Enterprise (NASDAQ:AXON), Pinterest (NYSE:PINS), Rubrik (NYSE:RBRK), Arista Networks (NYSE:ANET), and Motorola Solutions (NYSE:MSI) as top picks in this bucket. The firm also said that June analyst days reinforced a favorable stance on Cloudflare (NYSE:NET) and Rubrik.
Enterprise Software - Platform & Apps
Piper Sandler reports that application and vertical software underperformed in June, with application software down 6.7% and vertical software down 2.3% for the month. The firm notes that certain small- and mid-cap names have raised questions about the prospect of acceleration in the second half of the year, which has weighed on the segment.
Given that backdrop, Piper Sandler says its focus remains on hyperscalers, consumption-led models, or vertical software. Its top picks in the enterprise software category are Titan Machinery (NASDAQ:TTAN), Microsoft (NASDAQ:MSFT), Oracle (NYSE:ORCL), Global-e Online (NASDAQ:GLBE), and Freshworks (NASDAQ:FRSH).
The firm ategorizes its recommendations by where it perceives the combination of recent performance and underlying fundamentals to be most favorable, while flagging areas where prior gains or mixed near-term signals make the outlook more nuanced.
Selected tickers referenced: MDB, TEAM, VRNS, SNOW, PANW, AXON, PINS, RBRK, ANET, MSI, NET, TTAN, MSFT, ORCL, GLBE, FRSH.