---
title: "The AI Infrastructure Squeeze: Why Cloud Software is Splintering"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/291917782.md"
description: "The enterprise software sector is actively pivoting to AI, but value capture remains uneven. Infrastructure giants are raising full-year forecasts, while DevSecOps platforms navigate a shifting landscape of growth versus value."
datetime: "2026-07-07T10:38:49.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/291917782.md)
  - [en](https://longbridge.com/en/news/291917782.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/291917782.md)
generator: "portal-rs"
---

# The AI Infrastructure Squeeze: Why Cloud Software is Splintering

Mid-2026 has brought a quiet but profound shift in the cloud computing and enterprise software ecosystem. We are past the point of simply announcing AI features; the market is now demanding actual monetization. This matters because the gap between underlying infrastructure providers and top-layer application software is widening, forcing a brutal validation phase across the sector.

I'm told that the companies controlling the hardware and networking pipes are the ones seeing the clearest upside. Look at **Cisco (CSCO.US)**. The networking giant has already secured **USD 5.3 billion** in AI infrastructure orders for fiscal 2026, confidently raising its full-year target to **USD 9 billion**. Driven by this aggressive data center upgrade cycle, its shares have surged nearly **46%** this year, easily outperforming the broader market. **Cloudflare (NET.US)** is playing a similarly foundational role. The company recently rolled out advanced AI bot management controls, exploring a pay-per-use framework that compensates content creators. Analysts have taken note, upgrading the stock and citing its powerful positioning to capture top-tier AI clients at the edge.

And yet, as you move up the software stack, the reality is more nuanced. Application developers are indeed growing, but their market narratives are being re-rated. **Atlassian (TEAM.US)** is successfully pushing clients to its cloud ecosystem, with Q3 fiscal 2026 cloud revenue accelerating by **29%** year-over-year to **USD 1.13 billion**. The integration of its Rovo AI platform has certainly helped buoy its recent stock performance. But the broader software collaboration market is undergoing an identity crisis. Take **GitLab (GTLB.US)** as an example. The DevSecOps platform reported a solid Q1 fiscal 2027 revenue of **USD 264.2 million**, topping estimates. Still, technical adjustments by Russell indexes recently reclassified it from a growth benchmark to a value index—a move that ironically led to a double-digit percentage pop in its shares.

The truth, as usual, is more complicated. The AI tailwind isn't a monolithic force lifting all cloud stocks equally. Infrastructure and security players are currently enjoying the premium, while higher-level software makers are forced to prove their long-term viability in a shifting landscape. We are entering a phase where actual enterprise spend dictates the winners. Good luck with that.

*This article does not constitute investment advice.*

### Related Stocks

- [NET.US](https://longbridge.com/en/quote/NET.US.md)
- [TEAM.US](https://longbridge.com/en/quote/TEAM.US.md)
- [GTLB.US](https://longbridge.com/en/quote/GTLB.US.md)
- [CSCO.US](https://longbridge.com/en/quote/CSCO.US.md)

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> **Disclaimer: This article is for reference only and does not constitute any investment advice.**