美银-软件趋势：AI3.0：界面层价值上升-AI 3.0：the rising value of the interface layer-20261012

Accessibleversion

BofAGLOBALRESEARCH

BofASECURIES

SoftwareTrends

AI3.0:therisingvalueoftheinterfacelayer

IndustryOverview

Alischanginghowweinteractwithsoftware

Alischangingnotonlywhatsoftwarecando,buthowhumansinteractwithit.IfAl1.0wasthemodel,Al2.0wastheagent,thenAl3.0istheinterface,drivingameaningfulshiftintherelationshipbetweenusers,applicationsandthesoftwarestack.Historically,enterprisesoftwarevendorsownedeverylayeroftheexperience,fromtheapplicationandunderlyingdatatothebusinesslogicanduserinterface.AgenticAlisbeginningtodisaggregatetheselayers,raisinganimportantquestion:wheredoesvalueaccrueiftheinterfaceincreasinglymigratestoAl-poweredassistants?Applicationvendorscontinuetobenefitfromdeepentrenchment,proprietarydata,workflowsandbusinesslogic

However,ifusersincreasinglyinteractthroughexternalAlinterfaces,leadingAllabscouldgraduallymovedownthestackanddevelopcompetingapplicationlayers.

Theagenticera:fromanswerstoactions

Alagentscanunderstanduserintent,accessrelevantcontextandexecuteworkacrossapplications,buttheinterfaceisbecomingthefocalpoint,allowinguserstoexpressintentandwantedoutcomesthroughtheuseofnaturallanguageinachat-likebasedinterfaceratherthannavigatingcomplexsoftwareenvironments.Theapplicationdoesnotdisappear,butusersmaynolongerneedtovisititdirectly.Thiscreatesapotentiallong-termriskforenterprisesoftwarecompanies,eveniftheyownthedata,context,governanceandworkflows.Thequestionshiftstothelong-termabilityofthesoftwarevendorstoretainvalueasexternalinterfacescaptureshareoftheuserengagement.

Thegrowingneedforamiddlewarelayer

ThedeploymentofAliscreatingdemandforamiddlewarelayerthatintegratesthe

variouscomponentsofanAloffering:collectingandorganizingdatafrommultiple

sources,applyinggovernanceandcontrols,connectingsystemsacrossfunctionssuchasIT,HR,andCRM,exposingthesecapabilitiesthroughinterfacessuchasCopilot,Slack,ChatGPTorClaude.Orchestrationofthismulti-layereffortisbecomingimportantandgiventheearlystage,thesoftwarevendorsarelookingtoprovidethisthemselves.

Salesforce,forexample,hasstrengtheneditsdatapositionthroughInformaticaandData360,expandeditsagentcapabilities,andofferedinterfacesthroughSlackand

Claude.MicrosoftisalsowellpositionedtoowntheinteractionlayerbyleveragingitsproductivityecosystemandmakingCopilotastartingpointforallenterprisework.

ReducingthecostofAl

AnotherimportantconsiderationistheeconomicsofAldeployment.SoftwarevendorsownthedataanditscontextandcanpotentiallydeployAlmoreefficiently.Accessing

enterprisedatathroughthird-partyAlplatformsmayrequireadditionalextraction,

processing,andingestioncosts,whilesoftwarevendorscandeploysmaller,task-specificmodelsclosertothedataandworkflowstheyalreadymanage,reducingtoken

consumptionandinfrastructurecosts.Inourview,costefficiency,combinedwiththeabilitytointegratedata,applications,agents,interfaces,andsecuritywithinaunifiedarchitecture,willbecriticalindeterminingwhichvendorscaptureincrementalAl

spending,andaddresstheriskofdisintermediation.

BofASecuritiesdoesandseekstodobusinesswithissuerscoveredinitsresearch

reports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictof

interestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.

Refertoimportantdisclosuresonpage7to11.AnalystCertificationonpage5.Price

ObjectiveBasis/Riskonpage4.13025092

12October2026

Equity

UnitedStatesSoftware

TalLiani

ResearchAnalystBofAS

+16468555107

tal.liani@

EdenVacnich

ResearchAnalystBofAS

+16468551971

eden.vacnich@

KevinNiederpruem

ResearchAnalystBofAS

+1646855-1540

kevin.niederpruem@

Glossary:

Al:artificialintelligence

API:applicationprogramminginterface

CRM:customerrelationshipmanagement

HR:humanresources

IT:informationtechnology

MCP:ModelContextProtocol

ROI:returnoninvestment

SaaS:softwareasaservice

UI:userinterface

2SoftwareTrends|12October2026

Positioninginthenewinterfacelayer

Astheinterfaceseparatesfromtheapplication,enterprisesoftwarevendorsappeartoberespondingintwodirections.ThefirstisapushtoownthenewAIinterfaceitself,creatingaconversationalstartingpointwhereuserscanaccesscontext,reasonand

increasinglyexecuteworkacrossapplications.Thesecondacceptsthatusersmay

chooseathird-partyinterfacesuchasChatGPTorClaude,butseekstoensurethe

incumbent’sdata,workflowsandbusinesslogicremainindispensableunderneathit.Wedonotviewtheseapproachesasmutuallyexclusive.Infact,mostlargeenterprise

softwarevendorsarepursuingboth,attemptingtoowntheinteractionwherepossiblewhileensuringtheystillparticipateintheworkflowwhenanotherplatformownstheuser.

Wealsoseetheshiftshowingupinhowsoftwareismonetized.TraditionalSaaSpricinglargelyscaledwithhumanusers,butautonomousagentscancreatevalueandconsumeresourceswithoutanincrementalseat.Asaresult,themodelisincreasinglybecominghybrid:recurringseats/subscriptionsforusers,combinedwithconsumptionforagenticwork.Microsoft’snewCopilotexplicitlyseparatesitsusersubscriptionlicensefrom

usage-basedbillingformorecompute-intensiveagenticcapabilitiessuchasCowork,

CodeandAutopilot,whileSalesforceandServiceNowofferbothuser-basedlicensingandconsumption-basedcredits.Weviewthisasimportantfinancially,evenifAI

ultimatelyreducesthenumberofhumaninteractionswithtraditionalapplicationUIs,

consumptionprovidesvendorsanotherwaytomonetizetheworkoccurringunderneath.

Microsoft:Anaturalownerofthenewinterface

Microsoftiswellpositioned,inourview,toownthenewAIinterface,giventhatit

alreadyownsmanyofthesurfaceswhereknowledgeworkoccurs.Microsoft’sCopilot

makesthisstrategyincreasinglyexplicit:Homebecomesthestartingpointforwork,

combiningChatandCowork,whileWord,ExcelandPowerPointarebroughtdirectlyintoCopilot.Coworkisdesignedtoexecutedelegatedworkend-to-end,Codeallowsuserstobuildapplicationsandworkflowsthroughnaturallanguage,andAutopilotextendsthe

modelfurtherwithapersistentagentthatcontinuesworkingwithoutwaitingfor

anotherprompt.Importantly,Microsoftisnotbettingitsinterfaceonasinglemodel.Itssubscriptionincludesmodelselection,whileits“Auto”functionalitycanrouterequeststothemodelbestsuitedforagiventask.

MicrosoftalreadyhasdistributionthroughOffice,Teams,OutlookandWindows,while

MicrosoftIQ,itsintelligencelayerthatgroundsAIinanorganization’sdata,contextandpermissions,providestheenterprisecontextandgovernanceunderlyingCopilot.Ratherthancompetingprimarilyonmodelcapabilities,MicrosoftfocusesonmakingCopilottheplacewhereuserswork,whileallowingdifferentmodelsandthird-partyapplicationstopluginunderneath.WerecentlywroteaboutMicrosoft’smodelagnosticstrategy.

Salesforce:Playingbothsides

Salesforceoffersperhapstheclearestexampleofpursuingbothsidesoftheequation.Ononeside,SlackforcegivesSalesforceanopportunitytoowntheuserinteractionbyestablishingSlackasaconversationalfrontdoorforwork.Ontheother,AIforceand

ClaudeforcerecognizethatSalesforcedoesnotnecessarilyneedtoowntheinterfacetoremainvaluable:Salesforcemakesitsdata,workflows,businesslogic,actionsand

governancedirectlyaccessiblefromClaude,withactionscontinuingtorunthrough

Salesforce’sexistingpermissionsandbusinessrules.Salesforceitselfdescribesthisasashiftfromsoftwareastheinterfacetoward“softwarepoweringeveryinterface”.

Weseebothrisksandopportunities.OpeningSalesforcetothird-partyAIinterfaces

potentiallydilutesSalesforces’ownUIandgivesplatformslikeClaudegreaterownershipofuserengagementanddistribution.Butthealternativeisworseandwedon’tthinkitisevenpossibletoforcecustomersbackintoSalesforceasAIinterfacesproliferate.We

thereforeviewSalesforce’sapproachasapragmatichedge,wintheinterfacethrough

SoftwareTrends|12October20263

Slackforcewherepossiblewhilealsoofferingaccessthroughexternalinterfaces,keepingthedataanditscontextin-house.

ServiceNow:DoesServiceNowevenneedtoowntheUI

ServiceNowmaybethemostinterestingtestofwhetherowningtheUIisactually

necessary.Itsstrategicvaluehashistoricallybeenlessaboutaparticularscreenand

moreaboutorchestratingworkflowsacrossenterprisesystems,positioningServiceNownaturallyasasystemofactionunderneathwhicheverinterfacetheemployeechooses.ThatsuggestsServiceNowcouldremainincreasinglyrelevantevenifaClaude,ChatGPT,Copilotorotherinterfacesitsaboveit,providedServiceNowcontinuestoownthe

governedworkflowandexecutionlayer.

Thatsaid,thecompanyacquiredMoveworkstostrengthenitsconversationalAIand

enterprisesearchcapabilities,givingServiceNowanotherpathtobecomethestarting

pointforemployeeinteractions.Inourview,thiscreatesanappealingsetup:ServiceNowcanattempttoowntheinteraction,butarguablydoesnotneedtowinthatbattleto

preserveitsstrategicvalueiftheNowPlatformremainstheorchestrationandexecutionlayerunderneath.

Wealsoseesecurityandgovernanceasanincreasinglyimportantdifferentiatoras

agentsproliferateacrosstheenterprise.ServiceNowhasexpandedtheAIControlTowerbeyondvisibilityandmanagementtowardanenterprisecommandcenterspanning

discovery,observability,governance,securityandmeasurementofAIacrossthird-partyenvironments.TheacquisitionsofArmisandVezafurtherexpandthispositionwhere

ArmisaddsvisibilityacrossconnectedassetsandVezaprovidesintelligencearound

humanandnon-humanidentities,permissionsandaccess.ServiceNowisintegrating

thesecapabilitiesintoAutonomousSecurity&Risk,creatingagovernancelayer

spanningagents,identitiesandassets.AsAImovesfromansweringquestionstotakingactions,webelievetheabilitytounderstandwhatanagentcanaccess,governwhatitcandoandremediateissuesthroughexistingworkflowscouldbecomestrategic,furtherreducingServiceNow'sdependenceonowningtheend-userinterface.

Workday:lowdisplacementrisk,buthardertokeeptheUI

Workdayismakingadeliberatepushtoremainrelevantattheinterface,withits

acquisitionofSanaprovidingaconversationalexperienceacrossWorkdayandthird-

partyapplications,whileofferingagentsthatcansearchenterpriseknowledgeand

executeworkflowsacrossHR,financeandothersystems.Atthesametime,WorkdayisopeningitsunderlyingplatformthroughMCP,allowingthird-partyagentstosecurely

accessandactonWorkdaydatawhileretainingWorkday’spermissionsandgovernance.

Thebiggerquestioniswhethercustomerswillbewillingtopayincrementallyfor

Workdaytoownthatinterface.WithITbudgetsconstrained,incrementalAIspendneedstodemonstrateclearROI,andweseeahigherburdenofproofforWorkdayrelativetoAItiedtoknowledge-workerproductivity(MSFT),revenue-generatingworkflows(CRM),orIT/serviceautomation(NOW).Workday’srelativelylower-frequencyend-userinteraction,combinedwiththeabilitytoaccessitsunderlyingdataandactionsfromthird-partyAI

interfaces,couldmakeithardertojustifyincrementalspendonWorkday’sownAIinterfaceasMicrosoftandtheAIlabscompeteforthesamewallet.

4SoftwareTrends|12October2026

Exhibit1:Stocksmentioned

Pricesandratingsforstocksmentionedinthisreport

BofATicker

MSFTCRMNOWWDAY

Bloombergticker

MSFTUSCRMUSNOWUSWDAYUS

CompanynameMicrosoft

SalesforceServiceNowWorkday

PriceUS$535.07US$229.13US$140.86US$186.59

RatingB-1-7B-1-7C-1-9B-2-9

Source:BofAGlobalResearch

BofAGLOBALRESEARCH

Priceobjectivebasis&risk

MicrosoftCorporation(MSFT)

Ourpriceobjectiveof$600isbasedon28xourCY27EP/E,apremiumtothepeergroupof18-25x.Sustainedrevenuegrowthandmarginprofilewarrantsthemultipleabovethehighendofthepeergrouprange,inourview.

Downsideriskstoourpriceobjective:1)neartermgrossmarginpressureastheAzurebusinessgrowsasapercentageofoverallrevenue.2)AIapplicationsandmodel

providerscouldinnovateatafasterratethanMicrosoft,potentiallylimitingthe

company'sgrowthprofile.3)Enterpriseapplicationspendinghasproventobehighlycyclical,giventhemorediscretionarynatureofapplicationsprojects.

SalesforceInc(CRM)

Our$285POisbasedon16xourCY27EEV/FCFestimate,representingamodestpremiumtothesoftwarepeer-groupaverageof15x.Webelievethepremiumis

supportedbySalesforce'scomprehensiveenterpriseAIstrategy,improvingorganicgrowthoutlookandcontinuedstrongFCFgeneration.

Downsideriskstoourpriceobjectiveincludeslower-than-expectedAImonetization,weakerorganicgrowthduetocompetition,increasingupsellorpricingpressure,andgreatervaluecapturebythird-partyAIinterfaces.

Upsideriskstoourpriceobjectiveincludefaster-than-expectedorganicgrowth

reacceleration,strongerAgentforceandData360consumption,greaterpremium-editionadoptionandimprovedupsellefficiency.

ServiceNow(NOW)

OurPOof$150isbasedona23xCY27EFCFmultiple,abovethelargecapsoftwaregrouptradingat10-13x,forsuperiorrevenuegrowthlevelsandFCFmargins.

DownsideriskstoourPOareasfollows:1)ServiceNowsharescurrentlytradeata

premiumversusitslargecapsoftwarepeergroup,andwerecognizetheriskofa

potentialpullbackintheeventofchangestomarketsentimentoradisappointing

bookingsquarter.2)Inabilitytomaintainkeyproductadvantagesmayslowsharegains,andlargeestablishedcompetitorsinthespacemayposethreatstoServiceNow'sgoalofcontinuingtocapturemarketsharebycompetingonprice.3)Applicationspendingis

highlycyclical,whichcouldpresentahigherdegreeofriskforabookingsdeceleration

forServiceNowandotherapplicationvendorsintheeventofaneconomicslowdown.4)IncreasedAIadoptioncouldpressurethetraditionalSaaSmodelthroughhighercomputecosts,changesinpricingconstructs,orcustomerexpectationsaroundAIfunctionality

beingbundledratherthanmonetizedseparately.

WorkdayInc.(WDAY)

Our$205POisbasedon13.5xourCY27EEV/FCF,atthehighendofsoftwarepeersat9-13x,attributedtothecompany'srelativelystrongerrevenuegrowthprofile.

SoftwareTrends|12October20265

Downsideriskstoourpriceobjectivearefasterthanexpectedmonetization

compressionstemmingfromAI-nativealternatives,unprovenAIpricingtransition,headcountreductionsgreaterthanexpected,andcontractingandrenewalpressure.

Upsideriskstoourpriceobjectivearestrongerinstallbaseexpansion,moreeffectiveAImonetization,fastermarginexpansion,andincreasedmid-markettraction.

AnalystCertification

I,Taliani,herebycertifythattheviewsexpressedinthisresearchreportaccurately

reflectmypersonalviewsaboutthesubjectsecuritiesandissuers.Ialsocertifythatnopartofmycompensationwas,is,orwillbe,directlyorindirectly,relatedtothespecificrecommendationsorviewexpressedinthisresearchreport.

6SoftwareTrends|12October2026

US-NetworkingandSoftwareCoverageCluster

InvestmentratingCompanyBofATickerBloombergsymbolAnalyst

BUY

AkamaiAAMAAMUSTalLiani

Amdocs

DOX

DOXUS

TalLiani

AristaNetworks

ANET

ANETUS

TalLiani

Asana

ASAN

ASANUS

MattBullock

AtlassianCorp

TEAM

TEAMUS

ojiIkeda,CFA

Autodesk

ADS

ADSUS

TomerZilberman

BentleySystems

BSY

BSYUS

TomerZilberman

BoxInc

BOX

BOXUS

MattBullock

Ciena

CIEN

CIENUS

TalLiani

CiscoSystems

CSCO

CSCOUS

TalLiani

Cloudflare

NET

NETUS

TalLiani

Coreweave

CRWV

CRWVUS

TalLiani

DatadogInc

DDOG

DDOGUS

ojiIkeda,CFA

Dynatrace

DT

DTUS

ojiIkeda,CFA

ExtremeNetworks,Inc.

EXTR

EXTRUS

TomerZilberman

Figma

FIG

FIGUS

TalLiani

Fortinet

FTNT

FTNTUS

TalLiani

Global-eOnlineLtd.

GLBE

GLBEUS

MattBullock

HingeHealth,Inc.

HNGE

HNGEUS

TomerZilberman

JFrogLtd

FROG

FROGUS

ojiIkeda,CFA

MicrosoftCorporation

MSFT

MSFTUS

TalLiani

MongoDBInc

MDB

MDBUS

ojiIkeda,CFA

MotorolaSolutions

MSI

MSIUS

TomerZilberman

NebiusGroupN.V.

NBIS

NBISUS

TalLiani

OracleCorporation

ORCL

ORCLUS

TalLiani

PaloAltoNetworks

PANW

PANWUS

TalLiani

Paylocity

PCTY

PCTYUS

TomerZilberman

SalesforceInc

CRM

CRMUS

TalLiani

Samsara

IOT

IOTUS

MattBullock

SentinelOne,Inc.

S

SUS

TalLiani

ServiceNow

NOW

NOWUS

TalLiani

Shopify,Inc.

SHOP

SHOPUS

TalLiani

Snowflake

SNOW

SNOWUS

ojiIkeda,CFA

Twilio

TWLO

TWLOUS

ojiIkeda,CFA

ZetaGlobal

ZETA

ZETAUS

MattBullock

ZoomCommunications

ZM

ZMUS

MattBullock

Zscaler

ZS

ZSUS

TalLiani

NEUTRAL

Amplitude,Inc.

AMPL

AMPLUS

ojiIkeda,CFA

BandwidthInc

BAND

BANDUS

ojiIkeda,CFA

CheckPointSoftwareTechnologies

CHP

CHPUS

TalLiani

CrowdStrikeHoldingsInc.

CRWD

CRWDUS

TalLiani

ElasticNV

ESTC

ESTCUS

ojiIkeda,CFA

GitLabInc.

GTLB

GTLBUS

ojiIkeda,CFA

Intuit

INTU

INTUUS

TalLiani

M

MNDY

MNDYUS

MattBullock

OktaInc

OTA

OTAUS

TalLiani

SailPoint

SAIL

SAILUS

TalLiani

WorkdayInc.

WDAY

WDAYUS

TalLiani

UNDERPERFORM

Adobe

ADBE

ADBEUS

TalLiani

BlackLine,Inc.

BL

BLUS

TomerZilberman

C3.ai

AI

AIUS

ojiIkeda,CFA

Coveo

YCVO

CVOCN

ojiIkeda,CFA

DocusignInc

DOCU

DOCUUS

MattBullock

Dropbox

DBX

DBXUS

MattBullock

F5Inc

FFIV

FFIVUS

TalLiani

Fastly

FSLY

FSLYUS

TalLiani

HubSpot,Inc.

HUBS

HUBSUS

MattBullock

LightspeedCommerceInc.

LSPD

LSPDUS

MattBullock

LightspeedCommerceInc.

YLSPD

LSPDCN

MattBullock

PagerDuty

PD

PDUS

ojiIkeda,CFA

Paycom

PAYC

PAYCUS

TomerZilberman

SoftwareTrends|12October20267

US-NetworkingandSoftwareCoverageCluster

InvestmentratingCompanyBofATickerBloombergsymbolAnalyst

UiPathPATHPATHUSojiIkeda,CFA

ZoomInfoGTMGTMUSMattBullock

Disclosures

ImportantDisclosures

Microsoft(MSFT)PriceChart

TheInvestmentOpinionSystemiscontainedattheendofthereportundertheheading"FundamentalEquityOpinioney".Darkgreyshadingindicatesthesecurityisrestrictedwiththeopinionsuspended.Mediumgreyshadingindicatesthesecurityisunderreviewwiththeopinionwithdrawn.Lightgreyshadingindicatesthesecurityisnotcovered.Chartiscurrentasofadatenomorethanonetradingdaypriortothedateofthereport.

Salesforce(CRM)PriceChart

TheInvestmentOpinionSystemiscontainedattheendofthereportundertheheading"FundamentalEquityOpinioney".Darkgreyshadingindicatesthesecurityisrestrictedwiththeopinionsuspended.Mediumgreyshadingindicatesthesecurityisunderreviewwiththeopinionwithdrawn.Lightgreyshadingindicatesthesecurityisnotcovered.Chartiscurrentasofadatenomorethanonetradingdaypriortothedateofthereport.

8SoftwareTrends|12October2026

ServiceNow(NOW)PriceChart

TheInvestmentOpinionSystemiscontainedattheendofthereportundertheheading"FundamentalEquityOpinioney".Darkgreyshadingindicatesthesecurityisrestrictedwiththeopinionsuspended.Mediumgreyshadingindicatesthesecurityisunderreviewwiththeopinionwithdrawn.Lightgreyshadingindicatesthesecurityisnotcovered.Chartiscurrentasofadatenomorethanonetradingdaypriortothedateofthereport.

Workday(WDAY)PriceChart

TheInvestmentOpinionSystemiscontainedattheendofthereportundertheheading"FundamentalEquityOpinioney".Darkgreyshadingindicatesthesecurityisrestrictedwiththeopinionsuspended.Mediumgreyshadingindicatesthesecurityisunderreviewwiththeopinionwithdrawn.Lightgreyshadingindicatesthesecurityisnotcovered.Chartiscurrentasofadatenomorethanonetradingdaypriortothedateofthereport.

EquityInvestmentRatingDistribution:TechnologyGroup(asof30Sep202)

CoverageUniverseCountPercentInv.BankingRelationshipsR1CountPercent

Buy255

62.04%

Buy

157

61.57%

Hold82

19.95%

Hold

46

56.10%

Sell74

18.00%

Sell

31

41.89%

EquityInvestmentRatingDistribution:TelecommunicationsGroup(as

CoverageUniverseCount

of30Sep202)Percent

Inv.BankingRelationshipsR1

Count

Percent

Buy58

55.24%

Buy

49

84.48%

Hold23

21.90%

Hold

17

73.91%

Sell24

22.86%

Sell

21

87.50%

EquityInvestmentRatingDistribution:GlobalGroup(asof30Sep202

CoverageUniverseCount

)

Percent

Inv.BankingRelationshipsR1

Count

Percent

Buy2057

57.03%

Buy

1386

67.38%

Hold806

22.35%

Hold

563

69.85%

Sell744

20.63%

Sell

446

59.95%

R1IssuersthatwereinvestmentbankingclientsofBofASecuritiesoroneofitsaffiliateswithinthepast12months.ForpurposesofthisInvestmentRatingDistribution,thecoverageuniverseincludesonlystocks.AstockratedNeutralisincludedasaHold,andastockratedUnderperformisincludedasaSell.

SoftwareTrends|12October20269

FUNDAMENTAEQUITYOPINIONKEY:OpinionsincludeaVolatilityRiskRating,anInvestmentRatingandanIncomeRating.VOATIITYRISKRATINGS,indicatorsofpotentialpricefluctuation,are:A-ow,B-MediumandC-High.INVESTMENTRATINGSreflecttheanalyst’sassessmentofbothastock’sabsolutetotalreturnpotentialaswellasitsattractivenessforinvestmentrelativetootherstockswithinitsCoverageCluster(definedbelow).Ourinvestmentratingsare:1-Buystocksareexpectedtohaveatotalreturnofatleast10%andarethemostattractivestocksinthecoveragecluster;2-Neutralstocksareexpectedtoremainflator

increaseinvalueandarelessattractivethanBuyratedstocksand3-Underperformstocksaretheleastattractivestocksinacoveragecluster.Aninvestmentratingof6(NoRating)indicatesthatastockisnolongertradingonthebasisoffundamentals.Analystsassigninvestmentratingsconsidering,amongotherthings,the0-12monthtotalreturnexpectationforastockandthefirm’sguidelinesforratingsdispersions(showninthetablebelow).Thecurrentpriceobjectiveforastock

shouldbereferencedtobetterunderstandthetotalreturnexpectationatanygiventime.Thepriceobjectivereflectstheanalyst’sviewofthepotentialprice

appreciation(depreciation).

InvestmentratingTotalreturnexpectation(within12-monthperiodofdateofinitialrating)

Buy≥10%

Neutral≥0%

UnderperformN/A

RatingsdispersionguidelinesforcoverageclusterR2

≤70%

≤30%

≥20%

R2RatingsdispersionsmayvaryfromtimetotimewhereBofAGlobalResearchbelievesitbetterreflectstheinvestmentprospectsofstocksinaCoverageCluster.INCOMERATINGS,indicatorsofpotentialcashdividends,are:7-same/higher(dividendconsideredtobesecure),8-same/lower(dividendnotconsideredtobesecure)and9-paysnocashdividend.CoverageClusteriscomprisedofstockscoveredbyasingleanalystortwoormoreanalystssharingacommonindustry,sector,

regionorotherclassification(s).Astock’scoverageclusterisincludedinthemostrecentBofAGlobalResearchreportreferencingthestock.

PriceChartsforthesecuritiesreferencedinthisresearchreportareavailableonthePriceChartswebsite,orcall1-800-MERRILLtohavethemmailed.

BofASoroneofitsaffiliatesactsasamarketmakerfortheequitysecuritiesrecommendedinthereport:Microsoft,Salesforce,ServiceNow,Workday.

BofASoranaffiliatewasamanagerofapublicofferingofsecuritiesofthisissuerwithinthelast12months:Salesforce,ServiceNow,Inc.

Theissuerisorwas,withinthelast12months,aninvestmentbankingclientofBofASand/oroneormoreofitsaffiliates:MicrosoftCorp,Salesforce,ServiceNow,Inc.,Workday.

BofASoranaffiliatehasreceivedcompensationfromtheissuerfornon-investmentbankingservicesorproductswithinthepast12months:MicrosoftCorp,Salesforce,ServiceNow,Inc.,Workday.

Theissuerisorwas,withinthelast12months,anon-securitiesbusinessclientofBofASand/oroneormoreofitsaffiliates:MicrosoftCorp,Salesforce,S