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Investing.com -- HSBC has upgraded Autodesk to Buy from Hold, raising its price target to $388 from $343, citing strong artificial intelligence adoption and favorable capital expenditure trends.
In its note, HSBC said it has “switched our valuation methodology to target PEG (from target PE) given increasing signs that Autodesk is well placed to monetize AI and is likely to see margin expansion.”
The bank added: “We believe a premium is warranted as we expect a CY24-27e non-GAAP EPS CAGR of 16.7% for Autodesk vs 10-15% typical for the sector.”
Autodesk’s integration of AI across its core tools was highlighted as a key driver. “The company is embedding AI into its core tools, such as Fusion, AutoCAD, and Revit,” HSBC wrote.
The firm pointed to Autodesk Assistant, a natural language-driven AI agent, as well as the Auto Constrain feature in Fusion, where “90% of the constraints were generated by AI and 60% of these were accepted by the end user.”
HSBC said the company’s large installed base and repository of user-generated designs provide a “deep and wide data moat” to train its AI offering.
Beyond software, macro trends are also supportive. HSBC noted that Autodesk’s Architecture, Engineering, and Construction segment, which accounts for about half of forecast FY26 revenue, reported 23.1% year-on-year growth in the second quarter.
It expects rising data center demand and capex to continue driving momentum.
With shares trading at a CY26e non-GAAP PE of 26.6x, HSBC concluded: “Our target price implies 20.5% upside and we upgrade to Buy as we expect the stock to benefit from its AI exposure.”