Guggenheim upgrades Salesforce, Check Point and ServiceNow, says AI fears overdone

Investing.com -- Guggenheim Securities upgraded shares of Salesforce, Check Point Software Technologies and ServiceNow to Buy, arguing that investor concerns over artificial intelligence have driven software valuations to overly pessimistic levels despite limited evidence of severe business disruption.

The brokerage said software stocks have been hit by fears of an AI-driven “SaaSpocalypse,” but believes current valuations imply perpetual declines that are unlikely to materialize. Guggenheim expects subscription revenue growth across the software sector to stabilize in 2026 and potentially reaccelerate in late 2026 and 2027, supporting higher valuation multiples than those currently reflected in share prices.

Guggenheim upgraded Salesforce to Buy from Neutral with a $228 price target, saying the stock’s roughly 41% year-to-date decline has created an attractive entry point. While the firm acknowledged that agentic AI poses risks to Salesforce’s long-term growth, it said current valuations already discount an excessively negative outcome.

The brokerage also raised Check Point to Buy with a $188 price target, citing a significant discount to peers despite strong recurring revenue and cash flow characteristics. Separately, ServiceNow was upgraded to Buy with a $125 target as Guggenheim said the company remains positioned for double-digit growth, even as AI monetization remains uncertain.

Guggenheim said AI will reshape the software industry, benefiting segments such as cloud infrastructure, security and data intelligence while creating pressure for areas including DevOps, workplace collaboration and horizontal applications. However, it argued that many established software companies are likely to remain relevant and profitable despite slower growth trajectories.

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