By Kit Norton
Dropbox and more than a handful of other stocks received downgrades on Monday from William Blair analysts who say AI has injected increased uncertainty into the software sector.
The analysts, led by Jason Ader, downgraded Dropbox to Underperform from Market Perform, and took their ratings on Nutanix, AvePoint, Commvault Systems, Varonis Systems, Box, Backblaze, N-able, and GitLab to Market Perform.
"We believe we have entered a critical transition period where every infrastructure software company will need to rethink their product, their pricing and their go-to-market strategy," Ader and the William Blair team wrote.
However, the firm maintained its Outperform rating on S&P 500 titan Microsoft without disclosing a price target. It still sees Microsoft as well-positioned in the current market, noting that the Magnificent Seven company is one of the most "notable" AI beneficiaries in the software sector. The William Blair analysts highlighted Microsoft Azure and the growing adoption rates of the company's generative AI Copilots as reasons to be optimistic.
"The company sits at multiple control points across the enterprise estate -- cloud infrastructure, productivity software, developer tooling and security -- which should allow it to shape enterprise AI adoption rather than respond to it," Jader wrote.
Microsoft rose 0.9% to $385.38 in Monday trading. The S&P 500 and the Dow Jones Industrial Average each gained 1.7%.
Write to Kit Norton at kit.norton@barrons.com
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(END) Dow Jones Newswires
March 23, 2026 11:23 ET (15:23 GMT)
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