Wedbush has moved to re-plant its flag in battered enterprise software, arguing the recent sell-off in Salesforce Inc and ServiceNow Inc has overshot reality as investors fret about AI disrupting traditional SaaS economics.
The broker said the pair of big-cap enterprise software stocks were caught in what it views as an exaggerated “software Armageddon” trade, with the market “baking in a doomsday scenario” for software names.
“We believe the sell-off in tech stalwarts Salesforce and ServiceNow are way overdone,” Wedbush analysts said in an investment note, adding both companies should be “core participants in the AI Revolution.”
The anxiety, Wedbush said, is being fuelled by fast-moving AI tooling that could automate high-value tasks and intensify pressure on seat-based pricing models, alongside speculation that CIOs are redirecting budgets toward AI initiatives. The note highlighted that some 80% of CIOs may be focused on implementing AI and machine learning capabilities.
Wedbush expects AI spend to surge into 2026, citing “$650 billion” of Big Tech capex and broader demand from governments and large corporates. Against that backdrop, West Coast stockbroker said it is adding Salesforce and ServiceNow back to its IVES AI 30 list, while removing Roblox and Baidu.
Salesforce is positioned, Wedbush said, to monetise an enterprise installed base of more than 150,000 customers, including over 90% of the Fortune 500. ServiceNow, it added, is gaining traction with an end-to-end “Agentic AI-first” strategy built on its cloud-based platform approach.