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UBS Sees Slower Software Spend Growth in 2022, Downgrades Salesforce, Adobe

5:12PM ET 1/05/2022 MT Newswires
The software sector has experienced robust demand over the last 18 months with a risk that more demand was pulled forward than expected, suggesting slower software spend growth in 2022, UBS said in a note.

"The secular trends boosting 3rd-party software spend are strong enough to at least partly offset this pull-forward/deceleration risk in 1H22, but post these conversations we are more concerned that we are now trending to a more normalized (lower) growth rate, especially in sub-sectors such as 'front-office/sales and marketing' tech spend that was clearly accelerated," according to the report.

UBS downgraded Salesforce (CRM) and Adobe (ADBE) to neutral, citing concerns that front-office spending growth may

moderate this year. It is "more confident" about Microsoft (MSFT), Snowflake (SNOW), ServiceNow (NOW) and Workday (WDAY), UBS said.

UBS spoke to more than 25 IT executives and service partners in the final month of 2021 to discuss their 2022 IT spending outlook.

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