AI comes to SaaS: RBC Capital selects top software M&A targets.

2025-11-14T15:38:28.336Z

According to RBC Capital, the disruption of AI has made software companies prime targets for takeovers.
Software M&A activity is surging as private equity firms seek deals amid uncertainty caused by AI.
RBC analysts have identified a long list of software companies that could be potential M&A candidates.

The AI threat is sending shockwaves through the software sector, sending stock prices crashing and creating, in the words of analysts at RBC Capital Markets, a rare opportunity for “opportunistic” buyers.

Once-high-profile software companies are now trading at deep discounts as investors worry about how generative AI could upend SaaS business models. Analysts say the same fears are laying the groundwork for a new wave of deal-making.

Software M&A activity has surged 78% this year, according to RBC, and private equity deal value has more than doubled as sponsors look for bargains.

“Concerns around AI continue to underperform software, and if this decline in performance persists despite better-than-expected results, more buyers, especially in private equity, may step in opportunistically to take advantage of the disruption,” analysts said in a recent note to investors.

Chart showing software M&A activity

RBC Capital Markets

Analysts said they knew nothing about such deals, but listed potential targets, all with strong customer bases and cash flows, but with limited AI narratives. Private equity buyers, less constrained by quarterly earnings pressures, may act quickly to take these companies private, reset expectations, and restructure for an AI-first world.

Regulatory oversight remains a hurdle for big-cap tech acquirers, but financial sponsors have more freedom to strike. RBC expects trading momentum to accelerate as sentiment stabilizes and valuations remain depressed. For investors, the AI fears that sent software stocks crashing may soon become the catalyst for a new integration boom. This is not caused by hype, but by a rigorous search for value.

Here’s what RBC thinks about which software companies are likely to be targeted for mergers and acquisitions and why.

Asana (ASAN): Under pressure as AI-native competition increases and industry consolidation continues, this workplace and project management company remains a potential acquisition target despite its founder-controlled voting structure.
Box (BOX): With stagnant growth and an undervalued stock price, this cloud content management company could attract private equity buyers looking to reset expectations or strategic acquirers interested in its horizontal content platform.
Confluent (CFLT): Confluent is attractively positioned at the data streaming layer and could appeal to strategic buyers seeking deeper data infrastructure capabilities.
Coursera (COUR): Despite EdTech headwinds, Coursera’s large learner base and AI partnerships make it an attractive target for strategic buyers or the basis for a PE-led rollup.
Dropbox (DBX): Dropbox lacks the scale advantages of its larger cloud storage rivals, and could become a target if new products underperform, realizing greater value as part of a larger platform.
DocuSign (DOCU): DocuSign could attract private equity interest if the e-signature company’s identity access management axis doesn’t gain traction, but its valuation could deter many bidders.
Elastic (ESTC): Elastic’s GenAI momentum and leadership in search make it a logical target for strategic integration.
Five9 (FIVN): With strong contact center as a service (CCaaS) technology and the potential for higher margins, Five9 could appeal to enterprise companies like Salesforce and Cisco, or to private equity once leadership stabilizes.
Fastly (FSLY): With its solid edge computing technology and reasonable valuation, Fastly could be an attractive target for acquirers like Google and Cisco.
Gen Digital (GEN): Steady margins, strong cash flow, and revenue synergies could make the cybersecurity and fintech platform an attractive acquisition candidate for private equity.
GitLab (GTLB): GitLab’s growing presence in developer security operations and GenAI developer tools positions GitLab as an attractive strategic acquisition.
ZoomInfo (GTM): This company’s valuable customer relationship management data and integration potential make it a good fit for PE candidates for large platforms like Salesforce and operational optimization.
N-Able (NABL): Its foothold in the fragmented managed service provider and small business market makes N-Able an attractive consolidation strategy for private equity.
NICE (NICE): NICE’s CCaaS and compliance business is misunderstood and undervalued by the market and could unlock value through acquisition or divestiture.
Nutanix (NTNX): As hybrid cloud adoption increases, Nutanix’s scale and move to SaaS could make it a strategic target for major IT vendors.
PagerDuty (PD): PagerDuty is a logical acquisition to power your unified IT operations platform.
Qualys (QLYS): Qualys’ high profit margins and leadership in vulnerability management make it an attractive consolidation target within the cloud security sector.
Rapid7 (RPD): Rapid7’s improved cash profile could make it attractive to private equity buyers as it restructures and pivots from cybersecurity to DevSecOps.
Teradata (TDC): Advances in cloud analytics have positioned Teradata as a potential acquisition target for large vendors and PE firms.
Varonis (VRNS): With a focus on data security and governance, Varonis is well-positioned for GenAI-driven strategic acquisitions.
Zoom (ZM): Although not likely to be sold anytime soon, Zoom’s best-in-class video platform could tempt acquirers looking for synergies in AI and collaboration.