Many analysts predict that artificial intelligence software will gain significant momentum in 2025, with several companies well-positioned to capitalize on the increasing interest. In a research note dated January 14, Bank of America highlighted that while the U. S. software market expanded by 59% in 2023 and is expected to grow 23% in 2024, development forecasts remain below historical averages. 💰💸 Stay updated: Subscribe to TheStreet's free daily newsletter💰💸 "Revenue multiples and growth forecasts are still below the 5-year median and pre-COVID levels, " Bank of America noted, identifying three key themes for 2025: Agentic AI, rising enterprise IT budgets, and ongoing cloud migration. Similarly, investment firm Macquarie anticipates that the fundamentals of software stocks will "generally remain positive in 2025, " albeit "potentially interspersed with periods of volatility. " Related: Bank of America identifies top technology stock for 2025 "We expect sustained positive sentiment, driven by improved revenue trends and excitement surrounding agentic AI, " Macquarie stated. GitLab (GTLB) is a frequently cited name that could emerge as a leader in the AI software space. Despite experiencing a 10. 5% decline in 2024, this does not necessarily indicate impending difficulties. GitLab has partnerships with Amazon. Based in San Francisco and backed by Google, GitLab operates an open-source repository development platform for programmers. Agentic AI pertains to AI systems that can learn and make decisions autonomously without continuous human input. In the context of GitLab, this involves utilizing AI to assist developers in automating tasks and enhancing decision-making throughout the software development lifecycle. Last March, GitLab provided a disappointing full-year earnings forecast for fiscal 2025, leading to a roughly 20% drop in the stock price following the announcement. Midway through 2024, Reuters reported that GitLab was considering a potential sale, attracting interest from peers like Datadog, a cloud monitoring service.

Since then, however, no formal sale announcements have been made, and the company continues to operate independently. Nevertheless, GitLab's latest earnings report showed considerable growth. In December, the company announced total revenue of $196 million for Q3 of fiscal 2025, marking a 31% increase year-over-year. Related: Analysts adjust GitLab stock price target after earnings report “GitLab’s scalable growth demonstrates the demand for a platform-based approach to software development, ” said Sid Sijbrandij, co-founder and executive chair of the board of directors. Sijbrandij, who previously served as CEO, was succeeded by Bill Staples in December.