KeyBanc Capital Markets Revises Software Stock Outlook for 2025

KeyBanc Capital Markets has updated its 2025 outlook for several enterprise software stocks, identifying Salesforce Inc (NYSE:CRM) and Amplitude (NASDAQ:AMPL) as its top picks. In contrast, the firm has grown more cautious regarding ServiceNow (NYSE:NOW) and Monday.com (NASDAQ:MNDY).

Salesforce Upgrade

Salesforce has received an upgrade to “Overweight” from “Sector Weight,” accompanied by a price target of $440. KeyBanc analysts expressed optimism regarding Salesforce’s emerging Agentforce AI platform, which they believe will drive growth and foster demand across the company's ecosystem. Despite recent stock gains, KeyBanc sees potential for both valuation and fundamental upside due to its current discount compared to peers and anticipated margin expansion over the next two years.

ServiceNow Downgrade

Conversely, ServiceNow was downgraded to “Sector Weight” from “Overweight.” Although ServiceNow continues to lead in AI-driven workflow automation, KeyBanc analysts pointed out risks to its leadership as competitors introduce their own AI solutions. Additionally, potential reductions in U.S. government spending—a critical revenue source—could impact ServiceNow’s growth.

Amplitude's Upgrade

Amplitude has been upgraded to “Overweight,” with a price target of $15. KeyBanc noted signs of a turnaround, particularly in the improvement of annual recurring revenue (ARR) growth and the appointment of a new CFO focused on cost efficiency. The analysts expect significant margin expansion for Amplitude in 2025, allowing it to outperform other small-cap software stocks.

Monday.com Downgrade

Monday.com was downgraded to “Sector Weight,” with KeyBanc showing caution toward its 2025 guidance. Despite demonstrating resilience, analysts voiced concerns about the company’s capacity to meet high expectations, influencing their neutral outlook.

Other Downgrades

Moreover, KeyBanc downgraded ZoomInfo Technologies Inc (NASDAQ:ZI) to “Underweight,” maintaining a $10 price target. Analysts believe there are better opportunities for turnaround in other companies, given ongoing demand challenges and competitive pressures from smaller rivals.