In a surprising shift, Guggenheim upgraded both Salesforce (CRM) and ServiceNow (NOW) to Buy from Neutral, citing attractive valuations that have emerged after sharp selloffs. The moves come despite ongoing concerns that artificial intelligence could undermine traditional software-as-a-service (SaaS) models. Salesforce stock has plunged 41% year-to-date, while ServiceNow is down 33%. The upgrades, which see Salesforce with a $228 price target and ServiceNow at $125, are rooted in a belief that the 'Armageddon scenario' priced into these equities is unrealistic.
Importantly, Guggenheim analyst John DiFucci clarified that this is not a bet on these companies becoming AI winners. Instead, he views the current valuations as disconnected from fundamental business performance. Salesforce trades at just 3.7 times recurring revenue, a level he calls 'grossly undervalued', while ServiceNow's expected improvements in federal government business add to the appeal. The stance suggests that the market has overreacted to AI disruption fears—a signal that could ripple into other tech sectors, including cryptocurrency projects focused on artificial intelligence.
For crypto markets, the upgrades offer a double-edged narrative. On one hand, they indicate that institutional analysts see a floor forming under established tech names, which may lift risk appetite broadly. On the other hand, the explicit warning that AI remains a threat and not a growth driver tempers excitement for purely AI-themed tokens. Nevertheless, the idea that the worst-case scenario may be averted could provide a sentiment boost to AI-related cryptocurrencies such as Fetch.ai (FET), SingularityNET (AGIX), or Ocean Protocol (OCEAN), as well as broader layer-1 tokens that integrate AI functions. However, no direct correlation exists, and the immediate impact on crypto prices is likely muted.
Investors now await further quarterly reports from the software giants to gauge organic growth. A stabilization in these indicators could further ease the 'AI Armageddon' narrative, potentially benefiting crypto tokens that thrive on the intersection of AI and decentralized technology.
