Bentley Systems: The software compounder bringing infrastructure into the AI age

Leader in infrastructure software provides counter cyclical business model and upside from US reshoring/stimulus to drive revenues for years

Welcome to the 24th investment case, 20th resilience, 12nd reshoring/sovereignty and 11st AI & data center idea on Crack the Market (and the most comprehensive Bentley Systems investment case you will find online)! Join me as I dissect a very high quality compounder operating in the infrastructure software niche, providing strong growth with a very long runway, high recurring revenue base, exposure to counter-cyclical end-markets and improving margins, best of all the nascent digital twin trend could transform its business and expand its TAM.

Twice a week, I will release deep dives into stocks and sectors that fit into the three themes that I see winning in this age of tariffs and deglobalization: resilience, sovereignty & reshoring, China. I will then deep dive into the opportunities in the AI data center value chain.

Take advantage of this once in a generation opportunity to build long term wealth by investing in great stocks that will deliver returns for your portfolio for years to come.

You can already read my first 23 deep dives, all of which I see as winners in this new world of tariffs and deglobalization:

• ASML (reshoring & China idea): The most innovative company in the world will 2.5x its EPS by 2030.

• LKQ (resilience idea): The most defensive business in the auto industry is a tariff winner and could become a compounder.

• Atlas Copco (resilience, reshoring & China idea): The best industrials business in the world is on sale, extremely resilient and will benefit from US reshoring.

• Badger Meter (resilience idea): The perfect business in the perfect end market, water meters are the definition of resilience.

• Knorr Bremse (resilience idea): Who knew making brakes was this lucrative? Rerating with self help story and upside from German infra plan.

• Flex (reshoring idea): The electronics manufacturing giant building Nvidia’s servers and enabling reshoring is becoming a better business.

• Itron (resilience & reshoring idea): Riding the grid investment super cycle and enabling smart grids.

• Roper (resilience idea): A resilient cashflow compounder in the software space with inflecting growth.

• RELX (resilience idea): The company to own forever – one of the very best businesses on Earth.

• CPKC (resilience & reshoring idea): The rail connecting Canada/US/Mexico and benefiting from reshoring.

• Novo Nordisk (resilience idea): The most exciting pharma company in the world is misunderstood and its growth engine is ready to roar back to life.

• Kurita (resilience, reshoring & China idea): Water services expert with improving margins and benefiting from reshoring of semiconductor production.

• Halma (resilience idea): High quality compounder in safety, health and environmental technologies.

• Quanta Services (resilience & reshoring idea): Countercyclical compounder riding a multi decade infrastructure buildout.

• Infineon (China idea): Power semiconductor leader with strong structural drivers (AI power and China auto) amidst a cyclical recovery.

• Hubbell (resilience & reshoring idea): Pure play on US electrification demand driven by AI and grid investment cycle.

• Iberdrola (resilience & reshoring idea): Best integrated utility in the world with a stellar track record and solid growth driven by networks and renewables

• Nvidia (AI & data center idea): The backbone of the AI world is unstoppable.

• Veolia (resilience & reshoring idea): Resource management giant (water, waste, energy) due for a rerating.

• TJX (resilience idea): The retail giant that keeps winning.

• DSM-Firmenich (resilience idea): The diversified ingredient powerhouse benefiting from a transformational deal.

• Zoetis (resilience idea): Leader in animal healthcare.

• Prysmian (reshoring idea): Global cable leader entering a golden age.

After reading this article, you will understand why this company is so special thanks to its pure play exposure to the infrastructure space, what it does, why it is so defensive, even within the vertical software space, why it is so qualitative and therefore expensive, why the emergence and adoption of digital twin technology could significantly expand its TAM and accelerate its growth and why it remains one of the best businesses to own for the next decade.

In this article I go through:

1. Bentley’s business and how it dominates the infrastructure software niche.

2. How the company helps shape the world around us and build and maintain the infrastructure that underpins our lives and economies.

3. How the company aims to consistently compound its FCF at a mid teens rate, effectively doubling every 5 years.

4. How the deployment of digital twins and asset monitoring capabilities is about to transform the infrastructure space and dramatically expand the company’s TAM.

Bentley Systems Investment Case