The Quiet Software Stack Behind the AI Buildout

The quiet picks-and-shovels play hiding behind every blueprint of the AI buildout.

June 13, 2026

Everyone's piling into GPU makers, hyperscalers, and the power names. But there's a mid-cap software company whose tools sit inside almost every engineering firm designing the data centers, substations, and transmission lines the AI boom literally can't exist without. 

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The Quiet Software Stack Behind the AI Buildout

Everyone's piling into GPU makers, hyperscalers, and the power names.

But there's a mid-cap software company whose tools sit inside almost every engineering firm designing the data centers, substations, and transmission lines the AI boom literally can't exist without.

The Street is pricing it like a sleepy SaaS name. It isn't.

That company is Bentley Systems (NASDAQ: BSY), the infrastructure engineering software business.

At current prices in the $30 to $38 range, shares actually trade at an 18% premium to Morningstar's $22.00 fair value estimate, meaning the bull case here rests on fundamental compounding, not a discount-to-fair-value gap.

Shares have gone nowhere while the picks-and-shovels theme around them has run wild.

Action: Accumulate in the $30 to $38 zone ahead of fiscal Q2 earnings in early August. The AI infrastructure narrative tightens through the back half of the year.

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Operational Overview and Recent Earnings

Bentley makes the software civil and structural engineers use to design and operate physical infrastructure. Roads, bridges, rail, water systems, power plants, transmission grids, and yes, hyperscale data centers.

The flagship products (MicroStation, OpenRoads, OpenBridge, ProjectWise, and SYNCHRO) are embedded in workflows at the largest engineering firms on earth.

Then there's iTwin, the digital twin platform that lets owners and operators run living, sensor-fed simulations of physical assets.

Every hyperscaler racing to bring gigawatt campuses online needs this stack. So does every utility being forced to upgrade the grid for AI load.

Bentley closed its most recent quarter with annualized recurring revenue still compounding in the low double digits, and management reaffirmed full-year guidance even as broader software sentiment wobbled.

Subscription mix is now north of 90% of revenue. That's the part the market keeps undervaluing.

Action: Watch for ARR growth re-acceleration in the early August print and any commentary tying iTwin adoption directly to hyperscaler accounts. A reaffirmed or raised FY guide is the catalyst here.

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AI Buildout and Grid Modernization are Long-Term Catalysts

JLL's 2026 Global Data Center Outlook projects up to $3 trillion in combined real estate and tenant capex through 2030.

Every one of those campuses gets designed in software. Bentley's tools sit inside the workflow at the engineering firms doing the designing.

That's a tailwind nobody is modeling cleanly.

US transmission and substation investment is running at multi-decade highs to handle AI load.

ProjectWise and OpenUtilities are standard tools at the EPC firms winning that work. The longer rate cuts get pushed out, the more these projects become the most visible source of utility capex.

Layer on the OBBBA. Bonus depreciation and R&D expensing provisions are pulling forward private infrastructure spending, and Bentley's customers are the direct beneficiaries.

Translation: seat expansion and account upsell into 2027.

The financial signal backs it up. Free cash flow margins around 30% are elite even by software standards.

Net revenue retention has been holding above 105%, which tells you existing accounts are expanding seats and adding products.

In a software environment where NRR is rolling over for half the sector, that's a forward signal worth paying attention to.

Action: Monitor Bentley's Year in Infrastructure 2026 conference in October for hyperscaler partnership announcements and iTwin customer wins.

Track OBBBA and IIJA disbursement cadence as it flows through EPC bookings.

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Bear Case

Bentley trades around 35x forward earnings, which isn't cheap on an absolute basis. Any meaningful slowdown in seat growth makes this multiple look stretched fast.

The Bentley family retains supermajority voting power through dual-class shares. That's governance risk public investors take on as silent partners, and it also means a buyout is unlikely to be the exit catalyst.

A meaningful slowdown in infrastructure capex (say, from a hard recession or a freeze on permitting reform) would compress growth fast.

If the broader software sector keeps derating, BSY gets dragged with it regardless of fundamentals. We've already seen this play out with the Broadcom-led tech selloff over the past week.

Autodesk is also pushing harder into infrastructure with its AEC platform. Bentley's depth in horizontal infrastructure is the moat, but the competitive pressure is real and rising.

A meaningful slice of revenue comes from Asia-Pacific, so any escalation in trade restrictions on industrial software could pinch the international growth narrative.

There's also a longer-term thesis where generative AI commoditizes parts of the design workflow. Bentley is responding with AI features in iTwin, but the disruption risk isn't zero.

Action: Hedge with larger software names like Microsoft (NASDAQ: MSFT) or an AEC competitor like Autodesk (NASDAQ: ADSK) to shield against sector multiple compression.

Growth-focused investors who want pure-play infrastructure software exposure could pair BSY with a smaller name like Trimble (NASDAQ: TRMB).

How I'd Frame a Position

Start with a one-third position in the $30 to $38 zone. That gives you room to add on any market-wide tech weakness through summer without overcommitting before the next print.

If Q2 reaffirms ARR growth and shows iTwin acceleration, add another third on confirmation. The follow-through buy matters more than the anticipation buy here.

Already hold? Don't trim. If the compounding story stays intact through August, use any meaningful pullback as a chance to average down, not a reason to bail.

Setup Scorecard

Entry Zone: $30 to $38

Catalyst Timeline: Fiscal Q2 earnings in early August, Year in Infrastructure conference in October, OBBBA disbursement cadence through 2026

Confidence Level: Medium-High. Fundamentals are durable and the ARR compounding story is intact, but software multiple risk and Bentley family voting control keep this from being a slam-dunk.

Infrastructure Software Quietly Positions Bentley for the AI Decade

Bentley Systems sits inside the workflow of every engineering firm designing the AI buildout, the grid upgrade, and the infrastructure boom the OBBBA just supercharged.

The Street is treating it like a sleepy SaaS name while it quietly compounds ARR and free cash flow.

With the August earnings print as the next dated catalyst, the setup looks tight. This is a forward-looking pick on the compounding story, not a valuation gap play.

That's our coverage for today; thanks for reading! Reply to this email with feedback or any names you want us to dig into next.

That's our coverage for today; thanks for reading! Reply to this email with feedback or any tech stocks you want me to check out.

Best Regards,
—Noah Zelvis
Tech Stock Insider