Bank of America has published its preferred selections in the European software sector for 2026, identifying a group of names it views as combining attractive growth prospects with a degree of insulation from risks tied to rapid AI adoption.
SAP (ETR:SAP) leads the list as BofA's top large-cap software pick for 2026. The bank reiterated a Buy rating and increased its price target to c223 from c208, reflecting a lift in its target cloud multiple from 18x to 20x 2027 EBITDA. BofA notes SAP shares trade at 16.7x 2026 EV/EBITDA and expects revenue to grow at an 11.3% CAGR to 2028 alongside an 18% EPS CAGR to 2028. Those figures produce a 2026 EV/EBITDA-to-growth ratio of 1.1x, below the 1.5x reported for European peers. SAP also appears on the bank's broader "25 stocks for 2026" list.
Temenos (SIX:TEMN) remains on BofA's Buy list despite reporting a second-quarter revenue shortfall. The bank maintained its Buy rating and sees 1-3% upside to mid-term EBIT consensus for Temenos. The stock is valued in line with peers at 12.5x 2027E EV/EBITDA. BofA highlights Temenos 's more visible mid-term revenue outlook and lower AI disruption risk, and expects execution to continue improving through 2026-2027, aided by product and go-to-market investment, particularly in the United States.
Sage (LON:SGE) benefited from robust third-quarter results which led BofA to lift its FY26 organic top-line growth forecast by 40 basis points to 10.1%. The bank projects Sage will deliver a 9.7% revenue CAGR to 2028, supporting roughly 12% EBIT CAGR and 18% EPS CAGR. Valuation metrics for Sage sit broadly in line with European peers, with a 5.5% free cash flow to equity (FCFE) yield and 13.1x 2027E EBITDA.
Planisware (EPA:PLNW) saw its price target nudged up to c31 from c30 after solid second-quarter results. BofA highlights the company's strong growth profile, forecasting approximately 15% revenue CAGR and 17% EBITDA CAGR to 2028 - roughly six percentage points ahead of the broader sector. The bank points to the complexity of Planisware's integrations and workflows as a protective factor against AI disruption.
TeamViewer (ETR:TMV) retains a Buy rating with a c9.7 price target. Management reaffirmed FY26 guidance of 0-3% constant currency revenue growth and a 43% adjusted EBITDA margin. BofA notes the partnership with ServiceNow as a meaningful development aimed at mitigating concerns around potential disintermediation by larger platform players.
Nemetschek (ETR:NEM) had its price target raised to c93 from c91, reflecting the completed HCSS acquisition. BofA views the architecture, engineering and construction (AEC) software market as relatively insulated from AI-led disruption and expects Nemetschek to capture AI-driven value through product tiering and consumption-based pricing.
The bank 's roster underscores a preference for software companies combining identifiable growth paths, supportive execution narratives, and structural characteristics the bank judges less vulnerable to swift AI-driven displacement.