{"id":5301,"date":"2026-07-01T15:15:28","date_gmt":"2026-07-01T15:15:28","guid":{"rendered":"https:\/\/tradertideinsights.com\/?p=5301"},"modified":"2026-07-01T15:15:28","modified_gmt":"2026-07-01T15:15:28","slug":"servicenow-stock-jumps-after-guggenheim-upgrade-despite-ai-concerns","status":"publish","type":"post","link":"https:\/\/tradertideinsights.com\/?p=5301","title":{"rendered":"ServiceNow stock jumps after Guggenheim upgrade despite AI concerns"},"content":{"rendered":"
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ServiceNow NOW and Salesforce shares climbed 5% on Wednesday after Guggenheim upgraded the software companies, arguing that their valuations have become attractive despite ongoing risks posed by artificial intelligence.<\/p>\n

The upgrade comes after a difficult year for enterprise software stocks, with investors reassessing growth prospects as AI reshapes the industry. <\/p>\n

ServiceNow shares are down 33% so far in 2026, while Salesforce has fallen 38%.<\/p>\n

Guggenheim upgrades ServiceNow and Salesforce<\/h2>\n

Guggenheim analyst John DiFucci upgraded ServiceNow to Buy from Neutral and assigned a $125 price target, valuing the company at 7.5 times enterprise value to next-12-month recurring revenue.<\/p>\n

According to DiFucci, the upgrade reflects valuation rather than optimism that ServiceNow will emerge as a major AI winner.<\/p>\n

“We believe current levels present an attractive opportunity for investors to purchase a comfortably profitable stock likely to continue to grow at double digits,” DiFucci noted, citing expected improvements in the company’s US federal government business.<\/p>\n

His discussions with management suggest that ServiceNow’s government-related business could improve as disruptions tied to federal spending changes and procurement delays associated with the Department of Government Efficiency begin to ease.<\/p>\n

DiFucci also upgraded Salesforce to Buy from Neutral, saying investors have become overly pessimistic about the software company.<\/p>\n

He described the “Armageddon scenario” reflected in Salesforce’s valuation as “misaligned with reality.”<\/p>\n

Salesforce is currently trading at about 3.7 times projected enterprise value to revenue over the next 12 months, a valuation DiFucci believes is “grossly undervalued.”<\/p>\n

AI remains a risk, not a growth driver<\/h2>\n

Although DiFucci turned more constructive on both companies, he maintained a cautious stance on artificial intelligence.<\/p>\n

He has previously described AI as a major threat to software companies and said that view has not changed materially.<\/p>\n

“We want to be clear that we are not upgrading shares because we see [ServiceNow] as an AI beneficiary,” he wrote, adding that he believes AI monetization is “unlikely to materialize” for the company, and that the threat of artificial intelligence “does pose significant risks.”<\/p>\n

Regarding Salesforce, DiFucci also tempered expectations for future growth.<\/p>\n

“Realistically, the company will ‘struggle to grow much, but does not decline much either,'” he said. “This is not a call that [Salesforce] will be a beneficiary of AI, but we don’t believe it will decline as implied in the current valuation.”<\/p>\n

The brokerage also pointed to ongoing risks, including talent migration to AI-native startups and the company’s reliance on acquisitions, including Armis, to support growth.<\/p>\n

Investors turn attention to quarterly execution<\/h2>\n

Separately, Evercore ISI reiterated its Outperform rating on ServiceNow with a $150 price target ahead of the company’s second-quarter earnings report.<\/p>\n

The brokerage said investor attention has shifted from long-term AI strategy toward execution over the coming quarters.<\/p>\n

ServiceNow recently outlined its AI Control Tower strategy, AI-native product packaging, and a target of generating more than $30 billion in subscription revenue by fiscal 2030. <\/p>\n

According to Evercore ISI, the company’s long-term target implies subscription revenue compound annual growth of approximately 17.5% without requiring an acceleration in growth.<\/p>\n

According to Evercore ISI, the company’s long-term target implies subscription revenue compound annual growth of approximately 17.5% without requiring an acceleration in growth.<\/p>\n

For the second quarter, ServiceNow guided current remaining performance obligations growth of about 19.5% in constant currency, including contributions from the Moveworks and Armis acquisitions.<\/p>\n

Evercore ISI said investors will closely watch whether organic growth stabilizes as pressure in the federal government market eases and AI adoption increases. <\/p>\n

The firm added that constant-currency growth of 20% to 20.5% would likely meet expectations, while results closer to 21% or higher could help ease concerns about slowing organic growth.<\/p>\n

The post ServiceNow stock jumps after Guggenheim upgrade despite AI concerns<\/a> appeared first on Invezz<\/a><\/p>\n

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ServiceNow NOW and Salesforce shares climbed 5% on Wednesday after Guggenheim upgraded the software companies, arguing that their valuations have become attractive despite ongoing risks posed by artificial intelligence.The upgrade comes after a difficult year for enterprise software stocks, with investors reassessing growth prospects as AI reshapes the industry. ServiceNow shares are down 33% so…<\/p>\n","protected":false},"author":1,"featured_media":5302,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-5301","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stock"],"_links":{"self":[{"href":"https:\/\/tradertideinsights.com\/index.php?rest_route=\/wp\/v2\/posts\/5301","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tradertideinsights.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tradertideinsights.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tradertideinsights.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/tradertideinsights.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=5301"}],"version-history":[{"count":0,"href":"https:\/\/tradertideinsights.com\/index.php?rest_route=\/wp\/v2\/posts\/5301\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tradertideinsights.com\/index.php?rest_route=\/wp\/v2\/media\/5302"}],"wp:attachment":[{"href":"https:\/\/tradertideinsights.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5301"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tradertideinsights.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5301"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tradertideinsights.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5301"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}