Morgan Stanley advised clients that it expects certain infrastructure-focused software vendors to outperform as artificial intelligence reshapes demand across the technology sector. The guidance came in a Friday note following the firm’s recent TMT conference.
Analyst Sanjit Singh said the team emerged from the conference "feeling better about growth prospects in our infrastructure coverage," calling particular attention to companies whose platforms are so large and complex that customers would find it difficult and costly to recreate them using AI coding agents.
The firm reported that management teams from leading infrastructure vendors "did an effective job explaining why their businesses were not subject to AI disintermediation risks," pointing to the scale and complexity of those platforms and the higher total cost of ownership customers would face if they tried to rebuild comparable systems.
Morgan Stanley also emphasized multicloud positioning, saying it offers the availability and resiliency required for mission-critical workloads. The bank recommended investors focus on software firms that supply the resources AI agents are likely to consume in high volumes, calling out opportunities in data infrastructure and observability.
In its post-conference note, Morgan Stanley identified Snowflake, Datadog, Akamai and JFrog as the strongest beneficiaries of these trends. Snowflake’s presentation stood out, the firm said, with management displaying an "intense sense of urgency" about shifts in the industry. MongoDB was cited as an additional idea following those top picks.
Singh framed the outlook for 2026 around priorities already driving corporate technology spending. "As investors continue to debate the secular implications of a world moving to AI agents, we believe the outperformers in 2026 will be those companies tied to strongest priorities in the current environment," he wrote, highlighting accelerating cloud migrations, new application development, and sustained software development activity as areas likely to support winners.
Market implications - The note suggests investors should weigh exposure to companies providing foundational data and observability services, and to those with multicloud capabilities that support mission-critical workloads. The implications touch technology and software infrastructure segments, as well as enterprise cloud services.