Barclays upgraded Descartes Systems (DSGX) and downgraded ratings of Snowflake (SNOW), DoubleVerify (DV), and GitLab (GTLB) while highlighting the 2026 outlook for software stocks.
The firm also revised price targets of shares of the following companies while maintaining their respective ratings.
CoreWeave (CRWV): Price target lowered to $90 from $120 (Equal Weight).
Datadog (DDOG): $195 from $215 (Overweight).
Dynatrace (DT): $57 from $62 (Overweight).
Elastic (ESTC): $100 from $107 (Overweight).
Five9 (FIVN): $25 from $29 (Overweight).
HubSpot (HUBS): $525 from $575 (Overweight).
Klaviyo (KVYO): $42 from $43 (Overweight).
Microsoft (MSFT): $610 from $625 (Overweight).
Monday.com (MNDY) $194 from $202 (Overweight).
Paycom Software (PAYC) $185 from $210 (Equal Weight).
Commerce.com (CMRC): $3 from $5 (Underweight).
Paylocity (PCTY): $164 from $175 (Equal Weight).
Similarweb (SMWB): $10 from $12 (Overweight).
Sprout (SPT): $13 from $26 (Overweight).
Workday (WDAY) $275 from $280 (Overweight).
ZoomInfo Technologies (GTM) $12 from $14 (Equal Weight).
Appian (APPN) $34 from $37 (Underweight).
Lightspeed Commerce (LSPD): $14 from $15 (Equal Weight).
DigitalOcean (DOCN): Price target raised to $63 from $49 (Overweight).
JFrog (FROG): $70 from $67 (Overweight).
MongoDB (MDB): $480 from $415 (Overweight).
Salesforce (CRM) $338 from $330 (Overweight).
Teradata (TDC) $27 from $24 (Underweight).
UiPath (PATH): $18 to $16 (Equal Weight).
“We see a favorable set up for software in 2026. Macro and IT spending is stable, valuation levels are low and the sector is out of favor,” said analysts led by Raimo Lenschow.
The analysts added that this year we should see more meaningful AI revenue contributions both for the apps, Salesforce (CRM), and infrastructure names Oracle (ORCL), which should turn sentiment.
The analysts noted that in 2025, software underperformed the market (+6% for IGV versus +16% for S&P). Underlying reported results were actually solid but the various AI debates (e.g. seat pressure on apps and CapEx overspending for compute players) resulted in ongoing pressure on multiples.
“We see this changing in 2026. The apps guys will see growth support from easier comps (finally coming off COVID bubble headwinds), in our view, and well positioned vendors will start to generate proper AI agent revenue. For the infrastructure/compute names, we see the large RPO numbers from 2025 starting to turn into revenue in 2026, which makes the AI excitement more real,” said Lenschow and his team.
The analysts preferred names for the year are Salesforce (CRM), Oracle (ORCL) and DigitalOcean (DOCN).
Descartes Systems (DSGX)
Barclays upgraded Descartes to Overweight from Equal Weight and raised the price target to $105 from $106.
The analysts view the latest fiscal third quarter fiscal 2026 results as a positive inflection point that is being underappreciated when looking at recent performance (DSGX -21% last year versus IGV +8%.
“In our view, the worst is behind the company with Q3 organic growth reaccelerating from multi-year lows in fiscal 1H26 that were driven in part from tariff-related impacts,” said Lenschow and his team. “We see continued execution and easier comps in 1H27 supporting stable to slightly better underlying growth, with further room to drive inorganic growth in the medium-term through small tuck-in acquisitions, with conditions and recent management commentary supporting a favorable M&A environment for DSGX.”
The analysts noted that while they argue that Descartes is moving past the elevated impacts of uncertain macro conditions, they highlight that longer-term, supply-chain and logistics complexity fueled by changing regulations and requirements adds to Descartes’ value proposition.
In addition, the analysts believe that the company has done well to continue its platform build-out to further differentiate it from competitive point solutions, adding to the network effects of the Descartes’ platform, particularly as AI adoption and new use cases emerge in the supply chain management and logistics software space.
“Hence, we see potential for Descartes to outperform in CY26 and discuss three points supporting our improved company outlook,” said the analysts.
Snowflake (SNOW)
Barclays downgraded Snowflake’s rating to Equal Weight from Overweight and lowered the price target to $250 from $290.
“We continue to see Snowflake as a best-in-class software asset, evidenced by it boasting one of the strongest top-line growth rates in our coverage at proper scale and above average FCF margins. However, we see limited upside going forward following stellar outperformance in 2025,” said Lenschow and his team.
DoubleVerify (DV)
Barclays downgraded DoubleVerify’s rating to Equal Weight from Overweight with unchanged price target of $12.
“Over the last year, DoubleVerify has meaningfully underperformed the broader software landscape (-40% vs. IGV +6% in 2025). Though we saw strong revenue growth in 1H25, the subsequent drop-off in Q3 growth has created questions around where sustainable growth for the business will come from.,” said the analysts.
The analysts think that the shares are cheap at current levels, but they do not see a catalyst in the near-term to drive shares higher, with harder comps on the Activation business in the first half of 2026 and new products only benefiting numbers in the second half of 2026.
GitLab (GTLB)
Barclays downgraded GitLab’s rating to Underweight from Equal Weight and decreased the price target to $34 from $42.
The company said that GitLab shares have been under pressure (-41% in the last year versus IGV +89%) due to execution missteps, challenging macro that has made it difficult to acquire new customers (Small and Medium-sized Business, or SMB, in particular), increasing competition, and ongoing management changes that they expect have slowed the pace of innovation at the company.
“The company has made changes over the last few months to course correct, announcing a number of go-to-market changes (including a renewed focus on net new customer acquisition), integrations with leading opensource code generation tools (like Claude Code, Amazon Q, Gemini, etc), and increasing its salesforce capacity / quota carrying reps. Our decision to downgrade, however, is predicated on the idea that these changes will take time to come to fruition and GTLB will be lapping its contribution from its Premium tier price increase tailwind in FY27 (which mgmt has noted contributed ~10% of net new dollars in FY26),” said Lenschow and his team.
Overall, the analysts expect that GitLab will likely be a relative underperformer throughout the year and downgraded the stock to underweight.