Bloomberg Surveillance · Wednesday, July 8, 2026
Fatima Boulani of BMO Capital Markets highlights a growing divide in the software sector, with infrastructure software companies benefiting from the AI boom while traditional application software faces scrutiny. She notes that companies like DataDog and Cloudflare are well-positioned due to their role in supporting complex AI systems.
“We're continuing to see the bifurcation in software. So you have the two neighborhoods the application software names, so the Bellweather's there would be the Salesforce dot COM's and the Adobe's, and then you've got the infrastructure neighborhood, which by and large would include the hyperscalers, but I'll keep those separate because they're kind of a beast of their own in terms of how we think about them in the AI life cycle and value chain.”
“But the infrastructure names continue to get bid up, and that's functionally because it's the most immediate and we think the most correct way to express the you know, veritable AI winners and the software stock.”
“So infrastructure is the place to be because uh infrastructure software generally example, it would be a company like a data Dog or a cli outflare, right, So it's not terribly household names in the sense that we're used to like we are in the application realm.”