ServiceNow is presented as a premium software name benefiting from enterprise AI enthusiasm, with the stock trading as a poster child for AI while valuation expectations rise faster than revenue. Scaled software businesses face slower organic growth, and higher earnings multiples can act as a downside risk rather than upside leverage. Instead of funding the narrative, the focus shifts to enterprise companies integrating generative AI and database capabilities into existing customer footprints. Salesforce is highlighted as a value-oriented setup, with a depressed stock performance alongside accelerating AI-related revenue, strong forward visibility through remaining performance obligations, and aggressive capital returns via buybacks. Agentforce annual recurring revenue growth and deal activity are cited as direct evidence of AI monetization.
"ServiceNow's story is the same story every cycle. A premium software name catches the AI updraft, the multiple expands faster than the revenue, and retirement investors get talked into paying tomorrow's price for last year's growth. The law of large numbers is undefeated. Once a software business hits this kind of scale, organic growth slows whether the narrative likes it or not, and an elevated earnings multiple becomes a trapdoor rather than a stepping stone. You don't have to short the story to refuse to fund it."
"The smarter rotation is into the two enterprise giants quietly weaving generative AI and database layers into corporate footprints they already own. Both trade at far more conservative multiples. Both are on sale. Neither needs a miracle to work. Salesforce: AI Monetization Without the AI Tax. Salesforce ( NYSE:CRM) is the kind of setup contrarians wait years for."
"Salesforce ( NYSE:CRM) is the kind of setup contrarians wait years for. The stock is down 31.84% year to date and 37.01% over the past year, yet the business is accelerating where it counts. The P/E sits at about 20, with a free cash flow yield near 9.78%. That is a value multiple wearing a growth jersey."
"Three things matter here. First, Agentforce annual recurring revenue hit $800 million, up 169% year-over-year, with 29,000 deals closed. AI monetization is showing up directly in the financials. Second, total remaining performance obligations crossed $72.40 billion, giving management real forward visibility into the $45.80 billion to $46.20 billion FY27 revenue guide. Third, capital return is unusually aggressive: a fresh $50 billion buyback authorization on top of $12.7 billion already repurchased in FY26."
Read at 24/7 Wall St.
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