Analysis of Underrated AI Plays in SaaS Sector
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 hours ago
0mins
Source: Fool
- ServiceNow's AI Growth: ServiceNow anticipates AI commitments to reach $1.5 billion in 2023, a 50% increase from prior guidance, indicating rapid adoption of its AI offerings and solidifying its core position in IT infrastructure.
- Success of Hybrid Pricing Model: The company reports that 50% of its new business comes from non-seat-based pricing, including tokens and connectors, demonstrating that its hybrid pricing strategy is yielding early dividends and enhancing revenue diversity.
- Salesforce's Strategic Moves: Salesforce has effectively transformed its platform into an ideal environment for AI agents through its Data 360 product and the acquisition of Informatica, which enhances data governance and organization capabilities, thereby strengthening its competitive position in the market.
- Potential Growth of Agentforce: Although Salesforce's Agentforce is currently small, the rise of agentic AI is expected to drive significant growth in the future, positioning it as a key growth driver for overall business development.
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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: 106.970
Low
172.00
Averages
222.81
High
263.00
Current: 106.970
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.
Analysis of Underrated AI Plays in SaaS Sector
- ServiceNow's AI Growth: ServiceNow anticipates AI commitments to reach $1.5 billion in 2023, a 50% increase from prior guidance, indicating rapid adoption of its AI offerings and solidifying its core position in IT infrastructure.
- Success of Hybrid Pricing Model: The company reports that 50% of its new business comes from non-seat-based pricing, including tokens and connectors, demonstrating that its hybrid pricing strategy is yielding early dividends and enhancing revenue diversity.
- Salesforce's Strategic Moves: Salesforce has effectively transformed its platform into an ideal environment for AI agents through its Data 360 product and the acquisition of Informatica, which enhances data governance and organization capabilities, thereby strengthening its competitive position in the market.
- Potential Growth of Agentforce: Although Salesforce's Agentforce is currently small, the rise of agentic AI is expected to drive significant growth in the future, positioning it as a key growth driver for overall business development.
See More
ServiceNow Positions as AI Workflow Control Tower
- Market Positioning: ServiceNow is positioning itself as the enterprise control tower for AI-powered workflows, leveraging Now Assist adoption and deep customer integration to drive transformation in automation, which is expected to significantly enhance its market competitiveness.
- Revenue Growth: With continued growth in subscription revenue, ServiceNow's financial performance shows a strong upward trend, particularly against the backdrop of increasing enterprise demand for intelligent workflows, which is anticipated to further boost company performance.
- Automation Opportunities: The company faces a massive market opportunity in agentic automation, as enterprises seek to enhance efficiency and reduce costs, making ServiceNow's solutions a key driver for helping clients optimize their operations.
- Investor Challenges: Despite the optimistic outlook, rising AI costs and the company's premium valuation present real dilemmas for investors, necessitating careful assessment of future risks and returns.
See More
LinkedIn Launches BrandWorks Team Aiming for $100 Million Annual Revenue
- New Team Formation: LinkedIn has launched the BrandWorks team, which aims to achieve an annualized revenue of $100 million in the next fiscal year, enhancing its competitiveness in the business advertising market by delivering more effective ad campaigns.
- Team Expansion: The BrandWorks team has grown by approximately 60% in recent months as it aggressively hires talent from companies like TikTok and Meta, aiming to improve advertising service quality and meet enterprise client needs.
- Video Content Push: LinkedIn is encouraging publishers and creators to share more video content on the platform, with expectations that BrandLink revenue will nearly triple in the current fiscal year, reflecting the growing importance of video advertising in the B2B market.
- Young User Growth: Gen Z is the fastest-growing demographic on LinkedIn, with CEO video posts increasing by 68% over the past two years, indicating a rising trend of executives directly engaging with audiences.
See More
US Stocks Close: Nasdaq Hits 5-Week Low Amid Market Rotations
- Market Volatility: The S&P 500 index fell by 0.26% and the Nasdaq 100 dropped by 1.12% on Tuesday, indicating a shift to a downward trend after an early advance, reflecting investor concerns over tech stocks.
- Energy Price Impact: WTI crude oil prices plunged by 3% to a seven-week low, leading to widespread declines in energy producers' stocks, which exacerbated the overall market weakness and highlighted the direct impact of oil price fluctuations on related sectors.
- Real Estate Market Recovery: US existing home sales rose to 4.17 million in April, a five-month high, boosting the stocks of builders and suppliers, indicating that a recovery in the real estate market could provide positive signals for the economy.
- International Trade Data Improvement: China's May exports increased by 19.4% year-on-year, surpassing expectations, showcasing potential for global economic growth, which may positively influence the US market, despite ongoing uncertainties.
See More
US Stock Market Volatility Amid Falling WTI Crude Prices
- Mixed Market Performance: The S&P 500 index fell by 0.28%, while the Dow Jones Industrial Average rose by 0.19%, and the Nasdaq 100 index dropped by 0.80%, indicating a divergence in market sentiment, particularly with weakness in chipmakers and software stocks weighing on the broader market.
- Crude Oil Price Decline: WTI crude oil prices plunged over 3% to a one-week low, primarily due to the ceasefire agreement between Iran and Israel, leading to expectations of further declines in oil prices that could impact the profitability outlook for energy stocks.
- Positive Economic Data: The US trade deficit narrowed to $55.9 billion in April, better than the expected $56.1 billion, while existing home sales in May rose by 3.2% month-over-month to 4.17 million, indicating resilience in the housing market that may provide support for stocks.
- Company Movements: United Natural Foods saw its stock drop over 12% after reporting Q3 net sales below expectations, while Nuvalent's stock surged over 38% following GSK's agreement to acquire the company for $10.6 billion, reflecting varied market reactions to company fundamentals.
See More
Dow Jones Underperforms Today
- Today's Performance: Dow Jones is down 3.4% today, making it the worst-performing component of the S&P 500, reflecting market concerns about its future performance, which could impact investor confidence.
- Year-to-Date Performance: Despite today's decline, Dow has gained 41.4% year-to-date, indicating strong growth over the past period, but short-term volatility may prompt investors to reassess their positions.
- Other Component Movements: ServiceNow is down 3.0% today, indicating cautious sentiment towards its outlook, while SanDisk is up 5.7%, suggesting strong performance in the current market environment that may attract investor interest.
- Market Sentiment: The overall market sentiment is affected by Dow's decline, potentially leading to increased scrutiny and volatility in the performance of other components, which could influence the broader market trend.
See More
Analysis of Underrated AI Plays in SaaS Sector
- ServiceNow's AI Growth: ServiceNow anticipates AI commitments to reach $1.5 billion in 2023, a 50% increase from prior guidance, indicating rapid adoption of its AI offerings and solidifying its core position in IT infrastructure.
- Success of Hybrid Pricing Model: The company reports that 50% of its new business comes from non-seat-based pricing, including tokens and connectors, demonstrating that its hybrid pricing strategy is yielding early dividends and enhancing revenue diversity.
- Salesforce's Strategic Moves: Salesforce has effectively transformed its platform into an ideal environment for AI agents through its Data 360 product and the acquisition of Informatica, which enhances data governance and organization capabilities, thereby strengthening its competitive position in the market.
- Potential Growth of Agentforce: Although Salesforce's Agentforce is currently small, the rise of agentic AI is expected to drive significant growth in the future, positioning it as a key growth driver for overall business development.
See More
ServiceNow Positions as AI Workflow Control Tower
- Market Positioning: ServiceNow is positioning itself as the enterprise control tower for AI-powered workflows, leveraging Now Assist adoption and deep customer integration to drive transformation in automation, which is expected to significantly enhance its market competitiveness.
- Revenue Growth: With continued growth in subscription revenue, ServiceNow's financial performance shows a strong upward trend, particularly against the backdrop of increasing enterprise demand for intelligent workflows, which is anticipated to further boost company performance.
- Automation Opportunities: The company faces a massive market opportunity in agentic automation, as enterprises seek to enhance efficiency and reduce costs, making ServiceNow's solutions a key driver for helping clients optimize their operations.
- Investor Challenges: Despite the optimistic outlook, rising AI costs and the company's premium valuation present real dilemmas for investors, necessitating careful assessment of future risks and returns.
See More
LinkedIn Launches BrandWorks Team Aiming for $100 Million Annual Revenue
- New Team Formation: LinkedIn has launched the BrandWorks team, which aims to achieve an annualized revenue of $100 million in the next fiscal year, enhancing its competitiveness in the business advertising market by delivering more effective ad campaigns.
- Team Expansion: The BrandWorks team has grown by approximately 60% in recent months as it aggressively hires talent from companies like TikTok and Meta, aiming to improve advertising service quality and meet enterprise client needs.
- Video Content Push: LinkedIn is encouraging publishers and creators to share more video content on the platform, with expectations that BrandLink revenue will nearly triple in the current fiscal year, reflecting the growing importance of video advertising in the B2B market.
- Young User Growth: Gen Z is the fastest-growing demographic on LinkedIn, with CEO video posts increasing by 68% over the past two years, indicating a rising trend of executives directly engaging with audiences.
See More
US Stocks Close: Nasdaq Hits 5-Week Low Amid Market Rotations
- Market Volatility: The S&P 500 index fell by 0.26% and the Nasdaq 100 dropped by 1.12% on Tuesday, indicating a shift to a downward trend after an early advance, reflecting investor concerns over tech stocks.
- Energy Price Impact: WTI crude oil prices plunged by 3% to a seven-week low, leading to widespread declines in energy producers' stocks, which exacerbated the overall market weakness and highlighted the direct impact of oil price fluctuations on related sectors.
- Real Estate Market Recovery: US existing home sales rose to 4.17 million in April, a five-month high, boosting the stocks of builders and suppliers, indicating that a recovery in the real estate market could provide positive signals for the economy.
- International Trade Data Improvement: China's May exports increased by 19.4% year-on-year, surpassing expectations, showcasing potential for global economic growth, which may positively influence the US market, despite ongoing uncertainties.
See More
US Stock Market Volatility Amid Falling WTI Crude Prices
- Mixed Market Performance: The S&P 500 index fell by 0.28%, while the Dow Jones Industrial Average rose by 0.19%, and the Nasdaq 100 index dropped by 0.80%, indicating a divergence in market sentiment, particularly with weakness in chipmakers and software stocks weighing on the broader market.
- Crude Oil Price Decline: WTI crude oil prices plunged over 3% to a one-week low, primarily due to the ceasefire agreement between Iran and Israel, leading to expectations of further declines in oil prices that could impact the profitability outlook for energy stocks.
- Positive Economic Data: The US trade deficit narrowed to $55.9 billion in April, better than the expected $56.1 billion, while existing home sales in May rose by 3.2% month-over-month to 4.17 million, indicating resilience in the housing market that may provide support for stocks.
- Company Movements: United Natural Foods saw its stock drop over 12% after reporting Q3 net sales below expectations, while Nuvalent's stock surged over 38% following GSK's agreement to acquire the company for $10.6 billion, reflecting varied market reactions to company fundamentals.
See More
Dow Jones Underperforms Today
- Today's Performance: Dow Jones is down 3.4% today, making it the worst-performing component of the S&P 500, reflecting market concerns about its future performance, which could impact investor confidence.
- Year-to-Date Performance: Despite today's decline, Dow has gained 41.4% year-to-date, indicating strong growth over the past period, but short-term volatility may prompt investors to reassess their positions.
- Other Component Movements: ServiceNow is down 3.0% today, indicating cautious sentiment towards its outlook, while SanDisk is up 5.7%, suggesting strong performance in the current market environment that may attract investor interest.
- Market Sentiment: The overall market sentiment is affected by Dow's decline, potentially leading to increased scrutiny and volatility in the performance of other components, which could influence the broader market trend.
See More
