The Impact of Software Concerns on Private Credit and Recommended BDC Stocks to Consider
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 06 2026
0mins
Source: Barron's
- Private Credit Sector: The emergence of private credit "cockroaches" indicates a shift in the market, particularly affecting the software sector.
- Investment Opportunities: This situation may present new investment opportunities in shares of business development companies that hold the debt of these affected companies.
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Analyst Views on NOW
Wall Street analysts forecast NOW stock price to rise
32 Analyst Rating
30 Buy
2 Hold
0 Sell
Strong Buy
Current: 116.610
Low
172.00
Averages
222.81
High
263.00
Current: 116.610
Low
172.00
Averages
222.81
High
263.00
About NOW
ServiceNow, Inc. provides an artificial intelligence (AI) platform for business transformation. The Company’s AI platform connects people, processes, data, and devices to increase productivity and maximize business outcomes. Its intelligent platform, the Now Platform, is a cloud-based solution that helps enterprises and organizations across public and private sectors digitize workflows. The workflow applications built on the Now Platform are organized into four primary areas: Technology, CRM and Industry, Core Business and Creator. Its products include IT Service Management, IT Operations Management, HR Service Delivery, ServiceNow AI Agents, AI Experience, Build Agent, ServiceNow AI Control Tower, AI Agent Fabric, RaptorDB, Workflow Data Fabric, Workplace Service Delivery, ServiceNow Platform Encryption, Telecommunications Service Operations Management, and others. The Company also offers identity security, helping organizations secure access across the enterprise.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Strong Financial Performance: The earnings report released in late January revealed a 19.5% year-over-year increase in subscription revenue, surpassing management's expectations, while remaining performance obligations grew by 22.5%, indicating a rapidly expanding business pipeline.
- Management Confidence: CEO Bill McDermott purchased $3 million worth of stock last month, and the executive team halted automated selling plans, reflecting strong confidence in the company's future value, with aspirations of reaching a $1 trillion market cap.
- AI Opportunity: ServiceNow's Now Assist AI suite achieved $600 million in annual contract value by the end of 2025, with expectations to exceed $1 billion this year, showcasing the company's leadership in AI and robust market demand.
See More
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- Executive Confidence Boosted: CEO Bill McDermott purchased $3 million worth of stock last month, reflecting management's confidence in the company's future value, with a belief that it could reach a market cap of $1 trillion, up from the current $126 billion.
- AI Opportunities Emerging: The Now Assist AI suite's annual contract value is projected to reach $600 million by the end of 2025, with management expecting it to exceed $1 billion this year, highlighting the significance and growth potential of AI in the company's operations.
- Solid Market Position: Despite the overall software sector's recovery, ServiceNow is viewed as a premium investment choice due to its extensive product portfolio and customer loyalty, with a current P/E ratio of 29, still appearing attractive.
See More
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- Oil Price Volatility: Wright's deleted post about U.S. Navy escorting a tanker led to an over 11% drop in oil prices, which partially recovered after clarifications, highlighting market uncertainty regarding U.S. energy policy.
- Cloud Business Surge: Oracle's shares rose 10% after reporting a 44% increase in cloud revenue to $8.9 billion in Q3, with future performance obligations exceeding $550 billion, showcasing the company's robust growth potential in the cloud sector.
- Diverging Tech Stances: Microsoft supports Anthropic's legal battle against the Pentagon, seeking a temporary restraining order, while Alphabet aims to strengthen ties with the Defense Department by launching custom AI agent features, reflecting differing strategies among tech giants in government collaboration.
See More
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- Microsoft Capital Expenditure Analysis: While Microsoft's capital expenditures have raised investor concerns, analysts suggest that most of these costs are for contracted GPUs, which are expected to present significant growth opportunities, with a 12-month price target approximately 46% above its current share price.
- Salesforce Market Rebound: Salesforce's stock has fallen nearly 50% from its 2024 peak, yet analysts maintain an optimistic outlook with a 42% upside potential in the next 12 months, bolstered by expected double-digit revenue growth in the second half of the fiscal year.
- Investor Focus on Emerging Stocks: Although Salesforce did not make the Motley Fool Stock Advisor's top stock list, its leadership in cloud computing and AI keeps it in the spotlight for investors, especially in the context of a market rebound.
See More
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- Microsoft's Market Confidence: Despite Microsoft's stock stalling in Q4 2025, analysts project a 46% upside in its 12-month price target compared to its current price, indicating trust in its long-term growth potential in AI and cloud services.
- Salesforce's Recovery Outlook: Salesforce's stock has dropped nearly 50% from its 2024 peak, but analysts see a 42% upside in its 12-month price target, with the company expecting accelerated growth in the second half of the fiscal year, reflecting optimism about its recovery.
- Overall Industry Optimism: All three companies are affected by the
See More
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- Leverage Analysis: Oracle stands out as the most leveraged among key enterprise software companies, with a debt-to-equity ratio of 3.9 and a net debt-to-EBITDA ratio of 14.2, indicating significantly higher financial risk compared to Salesforce and its peers.
- Salesforce Bond Plan: Salesforce is reportedly planning to raise up to $25 billion through bond issuance to fund its massive stock buyback plan, underscoring the company's urgency to repurchase shares at depressed prices to enhance shareholder value.
- Market Sentiment Shift: Despite Salesforce's shares declining 26% year-to-date, there are mixed views on its valuation, with some investors believing that the current price levels present an attractive entry point, potentially drawing in more capital.
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See More
