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Jun 10, 2026 12:00 PM

Software Stocks Are Sinking In 2026, But These 'Fab Five' Are Up 30% — And BofA Says They're Just Getting Started

A clean split has opened up inside enterprise software this year. Most of the group is sliding. A small cluster of names is soaring.

And Bank of America thinks the gap is only going to widen.

• Datadog stock is trading near recent highs. What’s next for DDOG stock?

The five stocks Bank of America analyst Koji Ikeda now calls the “Fab Five”, Datadog Inc. (NASDAQ:DDOG), JFrog Ltd. (NASDAQ:FROG), MongoDB Inc. (NASDAQ:MDB), Snowflake Inc. (NYSE:SNOW) and Twilio Inc. (NYSE:TWLO), are up 30% on average in 2026, while the iShares Expanded Tech-Software Sector ETF (NYSE:IGV) is down 12%.

The analyst maintained Buy ratings on all five stocks, adding that recent earnings reports demonstrated a combination of solid execution, favorable AI exposure, differentiated products and effective go-to-market strategies.

"We think the setup is attractive for the rest of 2026," Ikeda said.

The Gap Is Even Wider Since Earnings

According to BofA, Datadog shares have ...