Software Stocks Hit Historic Low Valuations Amid AI Concerns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 17 2026
0mins
Source: NASDAQ.COM
- Declining Software Valuations: Software stocks have seen their forward P/E ratios drop to historic lows due to investor concerns over the long-term impact of generative AI, reflecting uncertainty about future profitability and widening discounts relative to the overall market.
- Salesforce Growth Potential: Salesforce's AI products achieved a 169% revenue growth over the past year, and despite a slowdown in overall revenue growth, management expects acceleration in the second half, forecasting $46 billion in revenue by 2027, indicating strong growth prospects.
- AI-Driven ServiceNow: ServiceNow's AI solutions reached an annual contract value of $600 million, exceeding management's $500 million goal, with expectations to hit $1 billion by 2026, showcasing its robust growth potential in the AI sector.
- Market Reaction and Investment Opportunities: Despite the uncertainties posed by generative AI, analysts believe the current low valuations present a favorable risk-reward opportunity for investors, particularly in companies like Salesforce and ServiceNow that demonstrate strong long-term growth potential.
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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: 90.500
Low
172.00
Averages
222.81
High
263.00
Current: 90.500
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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- Timing Coincidences: Some trades coincided with major news from the companies involved, such as purchasing Nvidia stock a week before a significant chip deal with Meta, suggesting Trump's potential sensitivity to market dynamics.
- Trust Management Transparency: The White House stated that Trump's assets are held in a trust managed by his children, asserting that
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