Guggenheim Sees ServiceNow, Salesforce as Buys After Selloff
A Guggenheim analyst argues AI-driven 'Armageddon' fears have pushed valuations too low for two major software giants.
A Guggenheim Securities analyst declared ServiceNow and Salesforce shares attractive buying opportunities this week, arguing that Wall Street has overreacted to artificial intelligence disruption fears and driven both stocks to unjustifiably depressed valuations, according to a MarketWatch report.
The analyst acknowledged that the AI threat to traditional enterprise software companies is genuine, but contended that pricing in a worst-case scenario — what the note characterized as "Armageddon" — goes far beyond what the evidence currently supports. That disconnect between fear and fundamentals, the analyst argued, creates an opening for investors willing to look past near-term anxiety.
Read more Microsoft Offers Better Value Than Apple Right Now →
Both ServiceNow and Salesforce occupy dominant positions in the enterprise software market, with deeply embedded customer relationships and large recurring revenue bases. Critics of the bearish thesis point out that established software platforms often adapt to and absorb technological shifts rather than being displaced by them — a pattern that has played out across multiple technology cycles.
The call reflects a broader debate rippling through technology investing: whether AI-native startups will erode the moats of legacy SaaS giants or whether incumbents will successfully integrate AI capabilities into their existing platforms and retain pricing power. Guggenheim's view lands firmly in the latter camp, suggesting the market selloff has created a valuation cushion that more than accounts for competitive risk.
For retail and institutional investors alike, the note signals that at least one major Wall Street firm believes the risk-reward balance has shifted favorably for two of the most widely held names in enterprise software. Continue reading at MarketWatch.com
