Gil Luria, head of technology research at D.A. Davidson, joins BNN Bloomberg to share his Hot Picks in software.

Several software companies could see accelerating revenue growth this year as enterprise customers move beyond early experimentation with artificial intelligence and refocus on core technology platforms. The opportunity lies in established software providers that benefit from recurring revenue, renewals and upgrades as AI becomes more embedded in everyday operations.

BNN Bloomberg spoke with Gil Luria, head of technology research at D.A. Davidson, who discussed why select supply chain, marketing and content management software companies could emerge from the shadow of larger AI players as revenue growth reaccelerates.

Key TakeawaysArtificial intelligence is expected to enhance, not replace, enterprise software, supporting durable revenue growth.Software revenue growth could reaccelerate as enterprises resume spending after AI-driven distractions.Recurring revenue models and renewals remain central to software sector stability.Upgrades and replacement of legacy systems are key catalysts tied to AI adoption.Valuations may improve as investors refocus on cash flow and sustainable growth.Gil Luria, head of technology research at D.A. Davidson Gil Luria, head of technology research at D.A. Davidson

Read the full transcript below:

ANDREW: Let’s get to Hot Picks. Our guest has three software ideas and is looking for an acceleration in revenues linked to artificial intelligence. Let’s get more from Gil Luria, head of technology research at D.A. Davidson. Gil, always great to talk to you. We’ve heard concerns that AI could hollow out traditional software companies. It’s going to vary, of course, but what do you think when you hear that thesis?

GIL: We don’t think it’s going to be any different from other technology cycles we’ve seen. Good companies that execute well won’t just survive the AI shift — they’ll thrive in it. That’s not the current market narrative, though. Software stocks have struggled over the last couple of years because of this idea that AI can magically replace software — that you can snap your fingers, generate code and suddenly have new marketing, content management or enterprise resource planning software. We don’t think that’s realistic. We think AI will be integrated into enterprise software gradually over the next few years, and strong software companies will continue to perform well. This is the year we think investors will start to realize that AI isn’t going to run over their software holdings.

ANDREW: Let’s start with Manhattan Associates, a supply chain software company. What attracts you to this stock?

GIL: Manhattan Associates has very strong domain expertise in supply chain management — warehouses, logistics and retail. Its customers tend to default to Manhattan’s software to manage complex supply chains. The business has a high level of recurring revenue, and the company also has a large consulting organization with specialized expertise in helping customers manage these systems. Its next-largest competitor is much smaller, which has supported consistent performance. This is also a year when, after a brief pause, we expect an acceleration in revenue growth across both its cloud and services businesses. Despite that, the stock is trading at one of the lowest multiples it has seen in a long time.

ANDREW: Another name you like is Zeta Global, a marketing software company. What does it do, and why does the stock stand out to you?

GIL: Zeta helps marketing teams understand how to reach and engage customers. It also works extensively with advertising agencies, particularly digital agencies, helping them identify customer segments and target them more effectively. That agency-focused business is growing even faster, allowing Zeta to serve the broader marketing ecosystem. The company has been gaining share from competitors such as Salesforce, which helps explain its faster growth. We expect Zeta to exceed expectations again this year, and to do so with higher-than-expected profitability.

ANDREW: A lot of companies are moving toward subscription models — not just selling a product once, but charging recurring fees. Is that just how software works now?

GIL: Yes. For all of the companies we’re discussing today, the majority of revenue is hosted software-as-a-service, which is recurring. Customers sign up and pay annually, and when contracts come up for renewal, pricing typically increases. That recurring model is what makes software businesses so attractive. It scales well and delivers very high incremental margins. Gross margins are often in the 70 to 80 per cent range, without much need to add fixed costs. The market has largely forgotten that over the last couple of years because of the focus on AI.

ANDREW: Finally, let’s talk about Box. Remind us what the company does and why you like it.

GIL: Box is a content management company. While consumers use services like iCloud or Dropbox, enterprises use Box to manage their content. The company has done a strong job adapting to the AI era because it focuses on unstructured data — documents and other information that doesn’t fit neatly into spreadsheets. Box is seeing a resurgence, and we think there’s an opportunity for revenue growth to accelerate this year. That potential isn’t reflected in the stock, which is trading in the low teens on a cash-flow basis, despite early signs of acceleration. CEO Aaron Levie is also a well-known thought leader in the technology community, particularly around AI, and we believe Box will increasingly get credit for that positioning.

ANDREW: You’ve said the key catalyst is accelerating revenue. Walk us through that thinking.

GIL: Over the past couple of years, many software companies saw revenue growth slow — not because AI disrupted them, but because AI distracted their customers. Enterprises spent heavily on internal efforts to figure out how to use AI, and as a result, they neglected their broader software stacks. This is the year when enterprise customers have a better understanding of what AI can and can’t do, and they can return to running their businesses — which includes buying more software. After a few years of deceleration, we think strong companies like the ones we discussed will see growth reaccelerate.

ANDREW: Gil, always great to talk to you. Thanks very much.

GIL: Thank you.

ANDREW: Gil Luria, head of technology research at D.A. Davidson.

DISCLOSUREPERSONALFAMILYPORTFOLIO/FUNDMANH NASDAQNNNZETA NYSENNNBOX NYSENNN

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This BNN Bloomberg summary and transcript of the Jan. 13, 2026 interview with Gil Luria are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.