Citi analyst Steven Enders, speaking after the firm’s Software bus tour investor meetings, identified Box Inc (NYSE:BOX) and Navan Inc (NASDAQ:NAVN) as the top picks in the application software sector. Enders highlighted that demand remains resilient and that artificial intelligence creates incremental near‑term opportunities, though the translation of product innovation into sustained revenue acceleration is uneven across the group.
Box is positioning itself as a governed orchestration layer for unstructured data as agentic AI expands beyond traditional content management. CEO Aaron Levie and CFO Dylan Smith said Enterprise Advanced upgrades and seat growth are supporting near‑term momentum, with pricing uplift expected to reach the high end of the 30‑40% range on upgrades. Approximately one‑third of migrations are accompanied by seat expansion. Management noted rising CISO involvement, which strengthens the security value proposition as AI agents gain access to sensitive content, increasing the importance of permissions, classification, and governance. Cross‑functional use cases are helping Box move toward wall‑to‑wall deployments, delivering stronger retention and net revenue retention improvements that have materialized faster than expected. Consumption currently represents about 5% of revenue, with a path toward 10%, and the principal constraint on agent adoption is increasingly implementation rather than underlying model capability.
Navan’s CFO Aurélien Nolf reported that commercial momentum remains robust, with second‑quarter bookings reaching a record level roughly 30% above the prior record. The company also signed its largest customer to date after quarter‑end. Navan has a substantial base of signed gross booking value totaling $4 bn of trailing twelve‑month new gross booking value, up 60% year‑over‑year, which is not yet fully reflected in reported results because large customers typically take seven to eight months to deploy. The company’s AI agent Ava now handles approximately 60% of support interactions, up from 40% a year ago, creating a meaningful gross‑margin opportunity. Management highlighted opportunities to increase monetization beyond core travel through Payments and the BoomPop acquisition, which adds exposure to meetings and events.
Enders expressed the most confidence in Box and Navan because demand appears resilient and AI is generating incremental near‑term opportunities, even as implementation challenges persist across the sector.