Investing.com — European software stocks may offer selective opportunities despite the sector’s sharp sell-off this year, Barclays says, pointing to a meaningful gap between potential AI winners and losers across the group.
The bank’s framework for assessing AI exposure points to clear differences in competitive positioning and monetization potential among major vendors.
While valuations have become more appealing following the recent correction, it remains “difficult to call a definitive bottom in software,” analysts led by Sven Merkt said, noting that the sector is still sensitive to AI-related headlines and remains heavily owned by long-only investors.
Within the coverage universe, the analysts see as the strongest beneficiary from the shift toward AI-enabled enterprise workflows. The company’s deep integration across industries, strong system-of-record position and extensive data infrastructure make it particularly well placed as automation spreads across enterprise software.
“SAP could be a real AI beneficiary if the company executes,” the analysts wrote, assigning the stock an Overweight rating and maintaining a €240 price target.
They see both limited competitive risk from AI-native entrants and scope for improved monetization as automation becomes embedded across finance, supply chain and procurement workflows.
is also viewed positively, with Barclays keeping an Overweight rating and price target of 85 Swiss francs. The analysts said the core banking software provider appears “broadly unimpacted by AI,” supported by strong barriers to entry, regulatory complexity and high switching costs in core banking platforms.
“We see limited risk that new players can replicate or displace Temenos’ core products,” they wrote.
In contrast, Barclays turned more cautious on , downgrading the stock to Equal Weight from Overweight and cutting its price target to €5 from €7. The analysts said AI could weaken the company’s long-term growth outlook by reducing the need for traditional remote-support tools as users increasingly resolve issues through automated assistants.
The team also flagged as the most exposed name in its coverage, maintaining an Underweight rating as AI-native competitors could intensify pressure on pricing and switching costs in the small-business accounting market.
Elsewhere, Barclays maintained Overweight ratings on and , while Dassault Systèmes remains rated Equal Weight.
Overall, the analysts said they “see significant long-term value opportunities emerging in the sector, but for investors with a shorter time frame, we believe the bigger opportunity is to separate the potential AI winner and losers in the sector for now.”