Goldman Sachs has initiated coverage on the U.S. software sector, drawing a clear line between winners and losers in what analyst Gabriela Borges calls the "decade of agentic workflow." The firm is bullish on Microsoft, Oracle, and ServiceNow, assigning them Buy ratings. Borges argues that AI adoption will be a major tailwind for the industry over the next decade, potentially lifting gross margins for infrastructure providers from under 40% to over 60%. Microsoft earns the firm's highest conviction, with Goldman citing potential upside to Azure revenue in 2026.

Oracle is favored for its expected path through a trough in gross profit growth, while ServiceNow is seen as well-positioned to benefit from the shift to agent orchestration. Conversely, Goldman advised avoiding Adobe and Datadog. Adobe's growth is seen as accruing away from the high end, while Datadog faces increased competition and customers focused on budget optimization.