AI-driven holographic plans overlay a construction site, illustrating workflow integration and cloud-connected data.
Palo Alto, CA, August 24, 2025
The Houzz State of AI in Construction and Design survey of more than 700 U.S. firms finds broad awareness, growing adoption and high expectations for AI across contracting and design workflows. Over a third of firms already use AI for administrative tasks, project management and content generation, reporting productivity gains and reduced manual work. Respondents highlighted gaps in training, trusted tools and data security as barriers to wider adoption, while larger firms show higher uptake. Market analysts raised targets for cloud, chip and data-platform vendors, and a cybersecurity vendor reported stronger AI-related recurring revenue and identity-focused priorities.
The latest findings from the inaugural 2025 U.S. Houzz State of AI in Construction and Design Report, compiled in Palo Alto, CA, paint a picture of a design and construction industry that is increasingly aware of artificial intelligence while balancing cautious optimism with real-world hurdles. The study surveyed more than 700 design and construction firms to understand how AI is reshaping workflows across the built environment. The report notes that design and construction professionals show a broad awareness, moderate adoption and high expectations for AI’s impact, and there is a clear call for support, training and trusted tools to help assimilate AI into everyday practice.
Key topline figures show that AI is already part of many firms’ routines. More than a third (34%) of industry professionals are using AI in their businesses. Those who use AI report benefits that include greater productivity, reduced manual effort and improved organization, with users indicating they save an average of more than hours per week (the specific hourly figure was not disclosed in the report). Even with this early wave of adoption, awareness remains widespread, with nearly 7 in 10 professionals saying they know about AI. Only about a quarter know AI less well, and a small 8% report no exposure to AI at all. The data also shows that nearly 3 in 5 professionals are familiar with AI tools designed for construction and design workflows.
The report highlights that adoption is significantly higher among larger firms with more than 10 employees, a signal that scale helps firms research, experiment and deploy new tools. In terms of use cases, construction professionals lean toward AI for administrative tasks and project management, while designers lean toward admin and content-driven tasks. Satisfaction among AI users is high, with nearly three-quarters expressing satisfaction with their AI experience and about 58% reporting a moderate to significant impact on their workflow. Yet concerns persist, centered on the reliability and accuracy of AI outputs, data security and privacy risks, and a training gap that can hinder broader adoption. The report emphasizes this as an opportunity for tools that integrate AI into familiar workflows and make adoption easier for professionals who want to stay competitive.
Within the broader AI landscape, Houzz points out that the industry’s trajectory will likely hinge on practical, workflow-ready solutions that can fit into the day-to-day routines of design and construction teams. The Palo Alto-based platform notes the ongoing need for training and support as a barrier to broader uptake, even as the potential for AI to accelerate accuracy and efficiency grows. Overall, the findings describe a market keen on AI’s potential but mindful of the need for credible, well-integrated tools and robust training resources.
Beyond the Houzz survey, the AI market continues to move quickly through major software and cloud providers. In the latest round of analysis, Truist Securities raised its price target on Microsoft to $675 from $650, underscoring sustained cloud and AI growth momentum. The firm cited a growth-enhancing halo effect across Microsoft’s infrastructure, data and applications, with upgrades to long-range forecasts for revenue, operating profit and cash flow. Azure is highlighted as a key driver, benefiting from workloads migrating to the cloud and the rapid expansion of AI use cases, with the firm noting potential upside from a broad portfolio that includes offerings like Fabric, Cosmos DB and Copilot-related products.
In the chip and AI accelerator space, Nvidia drew attention from KeyBanc, which noted the potential for a strong July quarter but projected a cautious stance for the October quarter given uncertainties in China. The bank discussed the possibility that excluding direct China revenue could be offset if China sales were included, estimating a potential incremental $2–$3 billion in revenue, depending on chip offerings and licensing. The report also highlighted supply growth in GPUs and the ramp of new generations, with expectations around rack manufacturing yields improving and shipments increasing toward year-end. The takeaway from KeyBanc is that Nvidia’s underlying growth story remains solid, even as geopolitics inject some near-term risk into projections.
Meanwhile, Bank of America Securities upgraded Snowflake to Buy from Neutral and lifted its target to $240, signaling stronger demand trends and longer-term AI and data services opportunities. The firm cited multiple data sources showing momentum in Snowflake’s core data warehouse business and in AI-oriented platforms like Cortex AI and Snowpark. Snowflake is viewed as central to many customers’ AI workloads, with surveys indicating rising budgets and expanding use of Snowflake for AI tasks. The upgrade reflects the broader AI software opportunity, which BofA estimates could be worth roughly $155 billion in the software market.
In market security news, Palo Alto Networks reported stronger-than-expected results for its fourth fiscal quarter, with earnings of $0.95 per share on revenue of $2.5 billion. For fiscal 2026, the company projected EPS in the range of $3.75 to $3.85 and revenue between $10.475 billion and $10.525 billion, both figures topping consensus expectations. The quarterly performance helped sustain a broader narrative around platform-wide growth, with the company highlighting a shift toward software-driven revenue streams. Bank of America subsequently upgraded Palo Alto Networks to Buy, citing a robust execution path and a favorable growth profile. Metrics cited included strong ARR expansion, solid RPO growth, and a rising share of revenue coming from software, as well as a large slate of platform deals that underscore the move toward an integrated security stack.
On the strategic front, Palo Alto Networks outlined a roadmap for a potential combination with CyberArk, an alliance that could deepen its identity security capabilities. Leadership signaled that the deal remains on track for the second half of the fiscal year, with expectations for adjusted free cash flow margins to exceed 40% for the combined company by 2028. Industry observers noted that the identity market, energized by increased use of agentic AI, could reach an inflection point in the coming 12 to 24 months. The pairing of identity with broader platform protections and SASE offerings is viewed as a way to expand market reach and wallet share across enterprise customers, aided by a sizeable partner network and a large base of customers for Palo Alto Networks.
Analysts also discussed ongoing AI-driven trends in the security space, including the growth of secure browsers and the concept of an enterprise browser emerging as a unifying interface for AI and cloud apps. Palo Alto Networks has been positioning its browser and platform-based offerings, such as Prisma Access Browser, to capitalize on this shift, with a strong emphasis on partnerships and the expansion of platform capabilities. Market commentary notes that as more critical data and apps move into the browser, secure browser solutions may become central to enterprise AI deployments, reinforcing Palo Alto Networks’ strategic posture in the AI era.
Industry watchers point to a broader pattern: software and AI players who can connect AI capabilities to reliable, secure platforms tend to outperform when combined with strong governance and data protection. The Houzz findings, while focused on construction and design workflows, align with a larger market trend where adoption accelerates when tools fit existing processes, come with training support, and reassure users about security and reliability. In parallel, the ongoing evolution of enterprise security—where identity, privacy and secure access intersect with AI—appears to be a central driver of strategic moves, including potential ties between Palo Alto Networks and CyberArk as AI-driven workstyles proliferate across organizations.
As the season for earnings and strategic announcements unfolds, investors and practitioners will watch for how these AI narratives translate into real-world efficiency gains, risk management improvements and stronger competitive positions for firms across construction, design and cybersecurity marketplaces. The convergence of AI-enabled workflows, cloud-scale infrastructure and secure, integrated platforms is shaping a broader shift in how projects are planned, built and protected in the AI era.
| Feature | Description |
|---|---|
| Report focus | Inaugural 2025 U.S. Houzz State of AI in Construction and Design, based on 700+ firm survey data from Palo Alto, CA |
| Adoption status | 34% of professionals using AI; higher adoption in larger firms; admin/project mgmt main use cases |
| Awareness and familiarity | Most pros aware of AI; 58% see moderate to significant impact; substantial familiarity with workflow tools |
| Benefits and concerns | Productivity gains and better organization cited; concerns include reliability, data security, privacy, and training gaps |
| Market moves cited | Microsoft cloud/AI growth context; Nvidia China exposure considerations; Snowflake AI workloads momentum |
| Security sector context | Palo Alto Networks results; potential CyberArk deal; focus on platformization and secure enterprise browsers |
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