Investing.com -- ServiceNow (NYSE: NOW) shares caught a 4% lift on Wednesday after Guggenheim analyst John DiFucci upgraded the software giant from Neutral to Buy, slapping on a $125 price target.

After closing at $99.28 on Tuesday, DiFucci’s new target values the company at 7.5x EV/NTM Recurring Revenue—a premium compared to its SaaS peers, but a price Guggenheim argues is worth paying.

"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, pointing to expected improvements in the crucial U.S. Federal Government sector.

Interestingly, this isn’t your typical tech upgrade. Since Guggenheim moved NOW from Sell to Neutral in December 2025, the stock plummeted 35%—vastly underperforming the IGV software index (-16%) and the S&P 500 (+10%) as investors panicked over AI-driven disruption.

DiFucci isn’t drinking the AI Kool-Aid either. He explicitly warned that AI monetization is unlikely to materialize anytime soon and that AI risks remain very real. However, the firm concedes that AI won’t be ServiceNow’s "death knell" either.

Instead, Guggenheim sees a battered, well-run company trading at a deep discount, even with lingering thematic risks like talent loss to AI-native startups and a heavy reliance on M&A (like its Armis acquisition) to fuel growth.