Wells Fargo Identifies Agentic Coding as Key AI Catalyst, Highlights Software Stocks

Agentic Coding Poised to Drive Next Phase of AI Growth

Wells Fargo has identified agentic coding, characterized as AI capable of building AI, as a significant catalyst expected to ignite a new wave of artificial intelligence development and substantially boost coding productivity. This assessment suggests that investors may be underestimating the profound impact of this technological shift, which began with the launch of agentic coding in February 2025. Unlike generative AI, which primarily focuses on content creation, agentic AI facilitates autonomous task handling, allowing for the creation of AI agents through plain-text prompts that then devise the necessary code. This evolution underscores a strategic shift towards greater automation and efficiency in software development.

Key Players and Market Response

In response to this emerging trend, Wells Fargo has highlighted three software companies positioned to benefit from the agentic AI boom, all holding "Strong Buy" ratings according to the TipRanks database. These include HubSpot, Inc. (HUBS), Atlassian Corporation (TEAM), and Braze (BRZE). The market's reaction to agentic AI advancements has been varied, reflecting both optimism for new growth opportunities and concerns over intensifying competition, particularly in the Software as a Service (SaaS) sector.

Atlassian's Strategic Expansion in AI

Atlassian Corporation (TEAM), a software giant with an $45.19 billion market capitalization and impressive gross profit margins of 82.84%, is making strategic moves to capitalize on the agentic AI wave. The company announced definitive agreements to acquire The Browser Company for $610 million and engineering intelligence company DX for approximately $1 billion in cash and restricted stock. These acquisitions, both expected to close in the second quarter of fiscal year 2026, aim to enhance Atlassian's cloud platform and provide enterprises with improved capabilities to measure the effectiveness of their AI investments in engineering teams. The integration of DX's platform is expected to offer visibility into AI adoption impact, developer experience, and productivity insights, a critical need as nearly all of DX's current customers are already Atlassian users. Analysts have responded positively, with Cantor Fitzgerald reiterating an "Overweight" rating and Bernstein an "Outperform" rating, citing these acquisitions as strategic wins. UBS and Jefferies have also raised price targets to $330 and $325, respectively, reflecting confidence in Atlassian's AI-driven transformation and projected 18% revenue growth for FY2026.

Braze Leverages Agentic AI for Customer Engagement

Braze (BRZE), a software company specializing in customer engagement for enterprise clients, has demonstrated strong performance driven by agentic AI advancements. Its AI-powered platform, BrazeAI, facilitates enhanced customer engagement through relevant messages, personalized content, and automated marketing processes. In its fiscal 2Q26 report, Braze exceeded expectations, reporting revenue of $180.1 million, a 24% year-over-year gain, surpassing forecasts by $8.5 million. Non-GAAP earnings reached 15 cents per share, beating predictions by 12 cents per share. Wells Fargo analyst Ryan MacWilliams maintains an "Overweight" (Buy) rating on BRZE with a $40 price target, indicating a potential 41% upside, attributing Braze's continued strength to agentic AI's role in boosting marketing velocity and sophisticated B2C marketing programs.

HubSpot Navigates Shifting Competitive Landscape

HubSpot (HUBS), a prominent marketing software platform, is actively integrating agentic AI into its features for prospecting and personalization agents. However, the company has recently faced significant competitive pressure, with its stock experiencing a 35% year-to-date decline. This downturn was partly exacerbated by OpenAI's direct foray into the application software market in early October 2025, which saw HubSpot's shares plummet 7.2% in a single day. OpenAI's introduction of internally developed tools for sales, inbound marketing, and customer support, core areas for HubSpot, triggered broader concerns across the SaaS sector. Despite these challenges, Cantor Fitzgerald reiterated its "Overweight" rating and maintained a $775 price target, while Wells Fargo initiated coverage with an "Overweight" rating and a $685 price target, signaling confidence in HubSpot's long-term prospects. The company is actively responding by unveiling over 200 product enhancements at its INBOUND 2025 conference, emphasizing a "human + AI hybrid" approach with intelligent assistants and AI-powered automation.

Broader Implications and Market Outlook

The emergence of agentic AI marks a pivotal shift in the evolution of artificial intelligence, with the market projected to grow significantly. Valued at $7.28 billion in 2025, it is expected to reach $41.32 billion by 2030, reflecting a robust 41.48% CAGR. This technological advancement is anticipated to transform various sectors, including healthcare, finance, logistics, and manufacturing, by enabling autonomous decision-making and enhancing efficiency. Organizations leveraging agentic AI have reported a 35% reduction in decision-making time and a 42% improvement in resource allocation efficiency. Major players like NVIDIA (NVDA) are also crucial enablers, providing specialized hardware and software solutions to drive advanced AI workloads. The competitive landscape, exemplified by OpenAI's aggressive expansion into application software, will continue to shape the strategies of established incumbents and new entrants alike. Investors will closely monitor further developments in agentic AI capabilities, strategic acquisitions, and the evolving competitive dynamics within the SaaS and broader AI sectors, as companies strive to leverage this transformative technology for sustainable growth and market leadership.