UBS Sees Construction Boom: Buying Autodesk and Procore

The construction industry is poised for significant growth, according to UBS, which recently initiated coverage of Autodesk and Procore with a 'Buy' rating. UBS cites the increasing adoption of advanced technologies and a strong market outlook as key factors driving its positive stance on these construction software providers. As construction spending in the U.S. surpasses $1.6 trillion in 2024, a 5.6% increase from 2022, investors are taking note of the opportunities in this sector.



One of the primary trends driving growth for Autodesk and Procore is the increasing integration of generative AI in construction. This technology enables companies to standardize data, providing more actionable insights and reducing risks. Autodesk's AutoCAD and Revit tools, along with Procore's platform, are well-positioned to benefit from this trend, as they support data-driven decision-making and improved project outcomes.

UBS also anticipates strategic moves by Autodesk and Procore to capitalize on construction industry growth. These moves may include leveraging generative AI to address labor shortages through tech-driven workforce empowerment, implementing sustainability programs to meet increasing ESG regulations, and enhancing risk management through data-driven insights.



The bullish outlook on the construction industry extends to other leading investment firms as well. Frost & Sullivan predicts a 14% CAGR in the global construction management software market by 2027, driven by AI, BIM, and sustainability adoption. Similarly, Grand View Research anticipates a 11.9% CAGR in the global construction software market from 2021 to 2028, citing advancements in digital technologies and increasing demand for efficient project management.

In conclusion, UBS's 'Buy' rating for Autodesk and Procore reflects a positive outlook on the construction market, driven by growth in construction spending and the increasing adoption of advanced technologies. As the industry embraces generative AI, BIM, and sustainability initiatives, these construction software providers are well-positioned to capitalize on emerging opportunities. Investors should consider the potential of these trends when evaluating the construction sector and the prospects for Autodesk and Procore.