The CIO’s priorities are clear. The public markets reveal them.
Two of five public software sectors are up over the last year. The other three are bleeding. The buying pattern is consistent : fund the AI stack, cut everything else.1
DigitalOcean leads the 1Y board at +430%, with Datadog, Palo Alto Networks, & Fortinet each clearing +50%. At the other end, Monday.com, HubSpot, & Atlassian have struggled.
The sector cuts make the dispersion legible.
Infrastructure & Dev Tools (13 names) leads at +68.5% 1Y, 21.4% revenue growth, 10.0x EV/Sales. DigitalOcean, JFrog, Datadog, MongoDB, Cloudflare, Snowflake, & Confluent sit here. The basket combines agent compute, the AI data stack, & developer tooling.
Security (8 names) is the only other positive sector at +17.6% 1Y, with the highest multiple in the sample at 11.6x EV/Sales & the fastest growth at 24.1%. Palo Alto Networks, Fortinet, CrowdStrike, & Okta carry the basket. AI is expanding both the attack surface & the defense surface, & the market is paying up for the line item that holds the perimeter.
AI & Mega-cap Platforms (9 names) is down -5.9% 1Y despite 21.5% growth. Apple, Microsoft, Nvidia, Meta, Oracle, & Palantir sit here. Growth & profitability are not enough.
Communications & Collaboration (9 names) is down -6.6% 1Y on 8.2% growth & a 2.4x multiple. The one exception proves the rule. Twilio is up +62% because AI agents send messages, & every agent needs a phone number. Even inside a losing sector, the AI-adjacent name wins.
Business Applications (48 names) is the carnage at -36.2% 1Y, 12.5% growth, 3.4x EV/Sales. Salesforce, Workday, & ServiceNow anchor the bucket. This is most of public SaaS, & it is the seat-priced layer most exposed to agent substitution.
Growth does not separate the winners from the losers. Infrastructure, Security, & the mega-caps all grow around 21%. What separates them is category. The market pays premium multiples for sectors CIOs believe are necessary during AI, & punishes horizontal application software where AI threatens the seat-based model.
Marc Benioff told the Logan Bartlett Show in September 2025 :
I’ve reduced it from 9,000 heads to about 5,000, because I need less heads.
[2] Agentforce now handles half of Salesforce’s customer interactions. Every CIO running Service Cloud just heard that on the same podcast.
The public market is pricing the same question I asked in So You Want to Sell Inference : is your product a payment processor or a software business? Twilio, DigitalOcean, Cloudflare, & MongoDB sit on the token path because AI agents send messages, run on compute, route through edges, & query data.
The export lacks a true YTD return field, so rankings rely on 1Y, 3M, & 1M returns. A YTD field could shift the order at the margin but not the pattern.
↩︎ - Marc Benioff on
The Logan Bartlett Show, September 2, 2025. Agentforce handles ~50% of Salesforce’s customer interactions; support costs are down 17%.↩︎