What is the new rating for Salesforce and ServiceNow?

Both were upgraded to Buy from a previous Neutral rating.

Was a new price target set?

No new price target was announced in the report.

What is the impact of AI on the software sector according to the analyst?

The analyst believes AI disruption fears were overblown, and companies like Salesforce and ServiceNow can leverage AI to their advantage.

Guggenheim Upgrades Salesforce, ServiceNow to Buy on AI Fear Overblown

Guggenheim Securities upgraded both Salesforce and ServiceNow to Buy, citing excessive AI disruption fears that have dragged down valuations and created attractive entry points.

July 1, 2026

2 min read

Source: StockStory

Guggenheim Securities, led by analyst John DiFucci, upgraded Salesforce (CRM) and ServiceNow (NOW) to Buy, signaling a shift in sentiment toward software stocks that have been battered by AI fears this year.

Rating Change

Both stocks were previously rated Neutral or equivalent. Guggenheim raised them to Buy without specifying a new price target.

Analyst Rationale

DiFucci believes AI disruption fears for the software sector have been overblown, leading to unjustified valuation compression. He argued that both Salesforce and ServiceNow possess strong competitive moats and can leverage AI to enhance their offerings.

Context

The broader tech sector, especially software, has faced selling pressure due to concerns that AI could reduce the need for traditional software. However, some analysts see this as an overreaction, with established players like Salesforce and ServiceNow well-positioned to adapt.

What to Make of It

The upgrade suggests Guggenheim sees a buying opportunity in software stocks after the recent decline. However, investors should remain cautious and consider the risks associated with technological disruption.

Frequently Asked Questions

Analyst John DiFucci believes AI disruption fears were overblown, causing unjustified valuation compression and creating a buying opportunity.

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This article was rewritten in Wrqti's editorial style based on information from the original source above. Content is informational only — not investment advice.