<div id="readability-page-1"><p>Top Goldman Sachs analyst Gabriela Borges has begun coverage of the U.S. software sector, telling investors that AI is entering a &#34;decade of agentic workflow.&#34; The firm named Microsoft (MSFT), Oracle (ORCL), and ServiceNow (NOW) as its top Buy-rated stocks, while warning that Adobe (ADBE) and Datadog (DDOG) may face pressure as not all companies are set to benefit equally.</p><h3>Claim 70% Off TipRanks Premium</h3><ul><li>Unlock  hedge fund-level data  and  powerful investing tools  for smarter, sharper decisions  </li><li> Stay ahead of the market with  the latest news and analysis  and maximize your portfolio's potential</li></ul> <h2><strong>What Stocks Does Goldman Sachs Recommend?</strong><strong></strong></h2> <p>Goldman's top pick is Microsoft, which it calls its highest-conviction idea. The firm sees upside to Azure revenue in 2026, supported by Microsoft's scale and a disciplined focus on growing the business while protecting margins.</p> <p>Oracle also earned a Buy rating, with Goldman pointing to improving visibility on spending and a likely rebound in profit growth by 2026. The bank is positive on Oracle's position in AI-driven cloud workloads and expects growth to pick up as new data center capacity comes online over the next year.</p> <p>The third Buy-rated stock is ServiceNow, which Goldman sees as a key winner as value shifts toward the &#34;agent orchestration&#34; layer of software. The firm believes ServiceNow's workflow platform and AI tools put it in a strong position to sustain solid growth, while expanding into areas such as CRM, ERP, and human capital management.</p> <h2><strong>Why Goldman Sachs Turns Cautious on Adobe and Datadog</strong></h2> <p>Goldman Sachs was more cautious on some software names, assigning Sell ratings to Adobe and Datadog. The firm warned that most new growth in the creative software market is happening at the lower end, where competition is rising and pricing pressure is increasing. It also noted that Adobe faces challenges in attracting new users, which could limit its ability to sustain double-digit growth.</p> <p>Goldman is also bearish on Datadog, warning that tougher competition could weigh on growth. Borges said that while Datadog remains a strong observability platform, competition is expected to intensify in 2026 as customers focus more on cutting cloud monitoring costs. She added that rising AI-driven data volumes and pressure from rivals could slow revenue growth and weigh on the stock's valuation.</p> <h2><strong>Wall Street's Take on These 5 Software Stocks</strong></h2> <p>Let's see how these five stocks perform using the TipRanks Stock Comparison Tool:</p></div>

MSFT

ORCL

MSFL

MSFO

MSFD

MSFU

MSFX

MSFY

<p>Goldman Sachs analyst Gabriela Borges has initiated coverage of the U.S. software sector, highlighting Microsoft, Oracle, and ServiceNow as top Buy-rated stocks. Microsoft is favored for its Azure revenue potential, while Oracle is expected to rebound in profit growth. ServiceNow is seen as a key player in AI-driven software. Conversely, Adobe and Datadog received Sell ratings due to rising competition and pricing pressures, with concerns over Adobe's user growth and Datadog's revenue amid intensifying competition.</p>

- Goldman Sachs analyst Gabriela Borges has initiated coverage of the U.S. software sector, predicting a significant shift towards AI-driven workflows.  
- The firm recommends Microsoft, Oracle, and ServiceNow as top Buy-rated stocks, while expressing caution on Adobe and Datadog due to increasing competition and pricing pressures in the market.  
- Microsoft is highlighted as the top pick, with anticipated growth in Azure revenue, and Oracle is expected to rebound in profit growth supported by AI cloud workloads.

Goldman Sachs Names 3 Top Software Buys — and Two Stocks to Avoid