Guggenheim Upgrades Salesforce, ServiceNow to Buy
Guggenheim's John DiFucci upgraded both Salesforce and ServiceNow to Buy, arguing that AI-disruption fears that gutted the sector during the year had pushed valuations too low.
Guggenheim analyst John DiFucci upgraded shares of Salesforce (CRM) and ServiceNow (NOW) to "Buy" in an afternoon research note. DiFucci argued that AI-disruption fears that battered the sector this year have driven valuations to excessively low levels.
Rating Change
The previous rating was not disclosed. The new rating is "Buy" for both stocks. No new price targets were provided.
Analyst's Rationale
DiFucci believes the market's fear of AI disrupting the software sector was overblown, leading to attractive valuations for companies like Salesforce and ServiceNow. He contends these firms can adapt to and benefit from AI technologies.
Context
The tech sector has experienced significant volatility over the past year due to concerns about AI's impact on traditional business models. However, some analysts see these fears as creating buying opportunities.
What to Make of It
The upgrade reflects a positive medium-term view on Salesforce and ServiceNow, but it does not constitute a buy or sell recommendation. Investors are advised to conduct their own research.
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