Investment Rating - The report indicates a generally optimistic sentiment in the software industry, particularly driven by advancements in artificial intelligence products, despite a prevailing pessimism among investors [2]. Core Insights - The report highlights that AI product improvements are expected to contribute to sustained revenue growth, with core business fundamentals stabilizing and key metrics like net expansion rate and CRPO showing improvement [1][2]. - There is a notable divergence in sentiment within the software industry, with optimism in infrastructure and pessimism in application layers, suggesting a potential shift in outlook as AI adoption increases [2]. - Private credit is emerging as a significant funding source for AI infrastructure, with a market size of approximately $1.5 trillion and expected double-digit growth in direct lending by 2030 [8]. Summary by Sections Software Industry Highlights - Companies are demonstrating tangible AI product improvements, with expectations for continued momentum in the coming quarters [2]. - Major players like Microsoft and HubSpot are exploring the integration of traditional SaaS with AI capabilities, emphasizing the importance of collaboration between humans and AI agents [3]. Vertical Software Developments - CEOs and CFOs believe that scaled vertical software exhibits resilience, with complex entry barriers in niche markets [4]. - Leading vertical software vendors are leveraging AI and large language models to enhance platform stickiness and optimize industry-specific processes [4][5]. Business Services Trends - General AI is significantly enhancing the functionality of data company products, with examples like CoStar improving real estate search capabilities [6]. - Companies are utilizing AI to improve internal efficiencies, as seen with KinderCare automating call center operations and NCR optimizing scheduling [6]. Data Center Market Insights - GenAI is driving increased demand for data centers, with Iron Mountain projecting a 30% revenue growth in the second half of 2025 and over 25% growth in 2026 and 2027 [7]. - The data center market is expected to continue expanding, with strong demand observed in key regions [14]. Private Credit Market Role - The private credit market is becoming increasingly important for funding AI infrastructure, with significant growth anticipated [8]. Entertainment Industry Trends - The live entertainment sector is experiencing strong demand, particularly for high-end experiences, with Live Nation reporting increased attendance and spending [18][19]. Payment and Fintech Dynamics - The payment and fintech sectors are stable, with Visa and Mastercard noting consistent consumer spending growth [20]. - There is a growing focus on AI in payment decision-making, with companies like Affirm and PayPal investing in consumer-friendly applications [21][22].