DA Davidson Upgrades Autodesk (ADSK) Stock to Buy

Autodesk, Inc. (NASDAQ:ADSK) is one of the Top 10 Software and Technology Stocks to Buy Now. DA Davidson upgraded the company’s stock to “Buy” from “Neutral” with a price objective of $375, up from the prior target of $305, as reported by The Fly. As per the firm, the recent improvements in Autodesk, Inc. (NASDAQ:ADSK)’s cost structure, governance, and execution exhibit that it remains on a path to reach top-quartile operating performance in the vertical and back-office software group.

The transaction model changes are expected to create noise around margins, but the firm opines that Autodesk, Inc. (NASDAQ:ADSK) has room to fuel efficiencies supportive of the significant profit growth. As per the analyst, the company remains only just above the peer median for GAAP operating margins, but there is a significant opportunity for Autodesk, Inc. (NASDAQ:ADSK) to improve margins over the upcoming few years and finally reach top decile levels. The company continues to focus on strategic priorities in cloud, platform, and AI, and is optimizing its sales and marketing to fuel increased margins.

For FY 2026, Autodesk, Inc. (NASDAQ:ADSK) expects Billings in the range of $7,160 million – $7,310 million, and the GAAP operating margin of between 21% – 22%. Parnassus Investments, an investment management company, released its Q3 2024 investor letter. Here is what the fund said:

“In Software, we added Autodesk, Inc. (NASDAQ:ADSK) and Cloudflare while exiting Bill.com. We believe Autodesk’s dominant position in architecture, engineering and construction software allows it to increase margins and offer attractive revenue growth. Autodesk is a market-leading vertical software company with the ability to meaningfully improve its margins, while its revenue growth should accelerate as it completes its sales channel re-alignment.”

While we acknowledge the potential of ADSK as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.