03:00 PM EDT, 04/10/2025 (MT Newswires) -- Software should be resilient despite market volatility, but deal cycles could slow amid macro uncertainty, RBC Capital Markets said.

The 90-day pause on reciprocal tariffs may offer some short-term relief, with the IGV software index higher by 12% on Wednesday, but RBC analysts said in a Wednesday note that "software buying cycles are cloudier than they were a few months ago."

Software buying trends, which were solid in January and February, slightly weakened in the second half of March and further in April, the analysts said.

RBC expects Q1 results to be broadly in line due to easy comps, though guidance may be conservative as CFOs factor in macro risks and slower large-deal activity.

Portfolio managers are seeing attractive long-term buying opportunities for select high-quality growth software "at valuations not seen in several years," the analysts said. However, the uncertainty around "on-again/off-again" tariffs and potential pressure on second-half estimates remains a concern.

Portfolio managers are seeing attractive long-term buying opportunities for select high-quality growth software "at valuations not seen in several years," the analysts said. However, the uncertainty of the "on-again/off-again" tariffs and potential pressure on H2 estimates is a cause for concern, they said.

RBC analysts said they are conservatively reducing the estimates and price targets for most of their on-quarter coverage, but they recommended buying CyberArk Software ( CYBR ) , Datadog ( DDOG ) , Cloudflare ( NET ) , and ServiceNow ( NOW ) .

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