Piper Sandler has identified Adobe (ADBE, Financial), MongoDB (MDB), and Salesforce (CRM) as top investment picks in the cloud software sector. Analysts led by Brent Bracelin suggest that growth-focused investors should consider increasing their stakes in these stocks, collectively referred to as 'MAC'. The recommendation is based on their current performance below market expectations, with share prices averaging 26% lower than their 52-week highs, despite having strong product and profit catalysts.
MongoDB, in particular, is anticipated to rebound strongly after reaching a low in the second quarter. The stock has dropped 29% this year, but Piper Sandler sees potential for it to recover this decline and reach $335 in the coming quarters, owing to its high-quality database franchise.
Adobe is similarly positioned to regain lost ground thanks to its latest AI products, which represent an underestimated innovation cycle that could stimulate growth.
Salesforce's stock has increased by 9% this year, although it has decreased nearly 5% over the last six months. Piper Sandler predicts an 11% rise to $325, with a bull-case scenario projecting a 39% increase to $405.
Piper Sandler assigns an 'Overweight' rating to Adobe with a price target of $635, and to Salesforce with a target of $325. MongoDB also receives an 'Overweight' rating with a target of $335.
