Morgan Stanley Adopts Constructive 2026 Outlook for Sprout Social (SPT) as AI Risks Ease
Sprout Social Inc. (NASDAQ:SPT) is one of the best small cap tech stocks to invest in now. On January 15, Morgan Stanley lowered its price target for Sprout Social to $12 from $14, while maintaining an Equal Weight rating. In a sector outlook, the firm noted that while application SaaS underperformed in 2025, there is growing evidence that AI-related risks may be less severe than previously expected, supporting a more constructive view for 2026. However, because broad-based positive spending revisions have yet to materialize, the firm remains selectively opportunistic regarding the group.
Additionally, on January 12, Barclays analyst Raimo Lenschow significantly reduced the price target for Sprout Social to $13 from $26, while maintaining an Overweight rating on the shares. This adjustment was part of a broader 2026 outlook for the software sector, where Barclays remains generally optimistic.
The firm noted that despite the price target cut, the setup for software in 2026 is favorable due to stable IT spending, steady macroeconomic conditions, and historically low stock valuations in a sector that is currently out of favor with investors.
Sprout Social Inc. (NASDAQ:SPT) designs, develops, and operates a web-based social media management platform in the Americas, Europe, the Middle East, Africa, and the Asia Pacific.
While we acknowledge the potential of SPT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.
Disclosure: None. This article is originally published at Insider Monkey.
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