Piper Sandler analyst Brent Bracelin has revised his outlook on Procore (PCOR, Financial), lowering the firm's price target from $110 to $75. Despite maintaining an Overweight rating, the adjustment reflects the growing near-term challenges facing the cloud applications and analytics sectors. These sectors are grappling with issues such as tariffs, changing policies, and obstacles in artificial intelligence (AI) adoption.
The sentiment towards application software companies has turned negative amidst slowing industry growth, marking the fourth consecutive year of this trend. AI adoption concerns are further aggravating these issues, suggesting that the enthusiasm for AI might be waning. The struggle is underscored by valuation multiples dropping to the lowest levels seen in seven years. However, Piper Sandler notes that while tariffs do impact these software models, their direct effect is relatively minor.
