The Impact of Software Concerns on Private Credit and Recommended BDC Stocks to Consider
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2d ago
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.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy NOW?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on NOW
Wall Street analysts forecast NOW stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for NOW is 222.81 USD with a low forecast of 172.00 USD and a high forecast of 263.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
32 Analyst Rating
30 Buy
2 Hold
0 Sell
Strong Buy
Current: 102.630
Low
172.00
Averages
222.81
High
263.00
Current: 102.630
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.
ServiceNow Reports Strong Q4 Results but Stock Plummets
- Performance Highlights: ServiceNow's Q4 sales increased by 20% year-over-year to $12.85 billion, with earnings per share at $0.92, reflecting strong growth and high profitability despite market challenges.
- High Renewal Rate: The company boasts a renewal rate of 98%, underscoring the critical role its software plays for over 8,000 clients, even as the market remains cautious about the future of SaaS.
- Market Concerns: With the rise of artificial intelligence, the market is apprehensive about the future of SaaS companies, leading to a 45% decline in ServiceNow's stock over the past year, with a current P/E ratio of 32, which remains reasonable for a company reporting double-digit growth.
- Strategic Shift: ServiceNow is actively integrating AI technologies, having formed significant partnerships with OpenAI and Anthropic to enhance product value and maintain its market leadership, although investor sentiment remains lukewarm, potentially creating future growth opportunities.
See More
Wedbush Readds Salesforce and ServiceNow to IVES AI 30 List
- Readdition to Investment List: Wedbush has readded Salesforce and ServiceNow to the IVES AI 30 list after a software sell-off, indicating analysts' optimism about these companies' long-term prospects and suggesting that the market's pessimism towards software firms is exaggerated.
- Early Days of AI Revolution: Analysts emphasize that the AI revolution is just beginning, predicting a decade of growth for tech stocks, particularly Salesforce and ServiceNow, which are expected to play key roles despite recent risk-off sentiment in the tech sector.
- Salesforce's Market Position: Despite being impacted by the software sell-off, analysts believe Salesforce's vast installed base of over 150,000 customers, including 90% of the Fortune 500, positions it well for future monetization, with the market potentially overlooking its growth potential.
- ServiceNow's Growth Potential: Analysts assert that ServiceNow's cloud platform and AI-first strategy will yield long-term benefits, and despite a 50% drop in share price over the past year, its extensive data ingrained in enterprise infrastructure will provide a competitive edge in the AI landscape.
See More
Wedbush Reinstates Salesforce and ServiceNow on AI Watchlist
- Market Confidence Restored: Dan Ives of Wedbush has reinstated Salesforce and ServiceNow to his AI stock watchlist, signaling a renewed confidence in these software giants that recently faced significant selling pressure, which may attract investor interest back to these stocks.
- Overreaction in the Market: Ives described the recent sell-off in software stocks as an overreaction that unfairly punished these heavyweight companies, which are fundamentally sound, potentially providing a buying opportunity for investors.
- Historical Changes: Ives noted on X that he had previously removed Salesforce and ServiceNow from his IVES AI 30 list in December, and their reinstatement reflects an optimistic outlook on their future performance, which could influence market perceptions of these companies.
- Investor Attention: With Ives' reinstatement, Salesforce and ServiceNow may draw more investor attention, especially against the backdrop of ongoing developments in the AI sector, potentially driving a rebound in their stock prices.
See More
ServiceNow Reports Strong Q4 Growth Amid SaaS Concerns
- Strong Client Base: ServiceNow serves over 8,000 global clients who rely on its workflow automation software to enhance operational efficiency, indicating robust demand despite market concerns surrounding software-as-a-service (SaaS).
- Impressive Financial Performance: Although ServiceNow's stock has plummeted 45% over the past year, its fourth-quarter report reveals double-digit growth with a price-to-earnings (P/E) ratio of 32, suggesting a reasonable valuation in the current market context.
- AI Integration Strategy: The company has secured significant partnerships with OpenAI and Anthropic to integrate ChatGPT and Claude LLM into its software, showcasing its proactive approach to enhancing product value and maintaining market leadership in the AI domain.
- Market Opportunity Analysis: Despite the current unpopularity of SaaS stocks, ServiceNow's ongoing growth and stable recurring revenue stream may present a buying opportunity for investors, particularly as AI technologies continue to evolve.
See More
ServiceNow Reports Strong Q4 Results but Stock Declines
- Significant Sales Growth: ServiceNow reported a 20% year-over-year sales increase in Q4, demonstrating strong market performance, and despite the stock decline, it reflects the company's potential in high-growth sectors.
- High Renewal Rate: The company achieved a 98% renewal rate, indicating high customer satisfaction with its services, which provides a solid foundation for future revenue stability and enhances investor confidence.
- AI Integration Strategy: ServiceNow has formed key partnerships with OpenAI and Anthropic to integrate ChatGPT and Claude LLM into its software, which not only enhances product value but may also strengthen its competitive position in the market.
- Market Reaction Tepid: Despite reporting earnings per share of $0.92, a 26% year-over-year increase, the stock has fallen 45% over the past year due to market concerns about the SaaS industry, potentially presenting a buying opportunity for investors.
See More
Investor Confusion in AI Competition
- Investor Sentiment Shift: Following earnings calls from tech giants like Microsoft, Google, and Amazon, investor confusion about future directions led to Amazon losing over $300 billion in market cap, reflecting strong skepticism regarding its $200 billion AI investment plan.
- Capital Expenditure Comparison: Google announced an increase in capital expenditures to $175 billion to $185 billion, exceeding the expected $115 billion to $120 billion, indicating a proactive approach in AI despite challenges from slowing ad revenues.
- Changing Competitive Landscape: With Alphabet's ongoing investments and successes in AI, YouTube's user base has grown to 750 million, and Waymo's self-driving business is outpacing Tesla, suggesting a strengthening competitive advantage that may attract more investor interest.
- Mixed Market Reactions: Despite OpenAI and Anthropic's strong performance in AI, Microsoft's Copilot sales have been disappointing, highlighting investor concerns about its future growth and reflecting differing levels of confidence across companies.
See More
ServiceNow Reports Strong Q4 Results but Stock Plummets
- Performance Highlights: ServiceNow's Q4 sales increased by 20% year-over-year to $12.85 billion, with earnings per share at $0.92, reflecting strong growth and high profitability despite market challenges.
- High Renewal Rate: The company boasts a renewal rate of 98%, underscoring the critical role its software plays for over 8,000 clients, even as the market remains cautious about the future of SaaS.
- Market Concerns: With the rise of artificial intelligence, the market is apprehensive about the future of SaaS companies, leading to a 45% decline in ServiceNow's stock over the past year, with a current P/E ratio of 32, which remains reasonable for a company reporting double-digit growth.
- Strategic Shift: ServiceNow is actively integrating AI technologies, having formed significant partnerships with OpenAI and Anthropic to enhance product value and maintain its market leadership, although investor sentiment remains lukewarm, potentially creating future growth opportunities.
See More
Wedbush Readds Salesforce and ServiceNow to IVES AI 30 List
- Readdition to Investment List: Wedbush has readded Salesforce and ServiceNow to the IVES AI 30 list after a software sell-off, indicating analysts' optimism about these companies' long-term prospects and suggesting that the market's pessimism towards software firms is exaggerated.
- Early Days of AI Revolution: Analysts emphasize that the AI revolution is just beginning, predicting a decade of growth for tech stocks, particularly Salesforce and ServiceNow, which are expected to play key roles despite recent risk-off sentiment in the tech sector.
- Salesforce's Market Position: Despite being impacted by the software sell-off, analysts believe Salesforce's vast installed base of over 150,000 customers, including 90% of the Fortune 500, positions it well for future monetization, with the market potentially overlooking its growth potential.
- ServiceNow's Growth Potential: Analysts assert that ServiceNow's cloud platform and AI-first strategy will yield long-term benefits, and despite a 50% drop in share price over the past year, its extensive data ingrained in enterprise infrastructure will provide a competitive edge in the AI landscape.
See More
Wedbush Reinstates Salesforce and ServiceNow on AI Watchlist
- Market Confidence Restored: Dan Ives of Wedbush has reinstated Salesforce and ServiceNow to his AI stock watchlist, signaling a renewed confidence in these software giants that recently faced significant selling pressure, which may attract investor interest back to these stocks.
- Overreaction in the Market: Ives described the recent sell-off in software stocks as an overreaction that unfairly punished these heavyweight companies, which are fundamentally sound, potentially providing a buying opportunity for investors.
- Historical Changes: Ives noted on X that he had previously removed Salesforce and ServiceNow from his IVES AI 30 list in December, and their reinstatement reflects an optimistic outlook on their future performance, which could influence market perceptions of these companies.
- Investor Attention: With Ives' reinstatement, Salesforce and ServiceNow may draw more investor attention, especially against the backdrop of ongoing developments in the AI sector, potentially driving a rebound in their stock prices.
See More
ServiceNow Reports Strong Q4 Growth Amid SaaS Concerns
- Strong Client Base: ServiceNow serves over 8,000 global clients who rely on its workflow automation software to enhance operational efficiency, indicating robust demand despite market concerns surrounding software-as-a-service (SaaS).
- Impressive Financial Performance: Although ServiceNow's stock has plummeted 45% over the past year, its fourth-quarter report reveals double-digit growth with a price-to-earnings (P/E) ratio of 32, suggesting a reasonable valuation in the current market context.
- AI Integration Strategy: The company has secured significant partnerships with OpenAI and Anthropic to integrate ChatGPT and Claude LLM into its software, showcasing its proactive approach to enhancing product value and maintaining market leadership in the AI domain.
- Market Opportunity Analysis: Despite the current unpopularity of SaaS stocks, ServiceNow's ongoing growth and stable recurring revenue stream may present a buying opportunity for investors, particularly as AI technologies continue to evolve.
See More
ServiceNow Reports Strong Q4 Results but Stock Declines
- Significant Sales Growth: ServiceNow reported a 20% year-over-year sales increase in Q4, demonstrating strong market performance, and despite the stock decline, it reflects the company's potential in high-growth sectors.
- High Renewal Rate: The company achieved a 98% renewal rate, indicating high customer satisfaction with its services, which provides a solid foundation for future revenue stability and enhances investor confidence.
- AI Integration Strategy: ServiceNow has formed key partnerships with OpenAI and Anthropic to integrate ChatGPT and Claude LLM into its software, which not only enhances product value but may also strengthen its competitive position in the market.
- Market Reaction Tepid: Despite reporting earnings per share of $0.92, a 26% year-over-year increase, the stock has fallen 45% over the past year due to market concerns about the SaaS industry, potentially presenting a buying opportunity for investors.
See More
Investor Confusion in AI Competition
- Investor Sentiment Shift: Following earnings calls from tech giants like Microsoft, Google, and Amazon, investor confusion about future directions led to Amazon losing over $300 billion in market cap, reflecting strong skepticism regarding its $200 billion AI investment plan.
- Capital Expenditure Comparison: Google announced an increase in capital expenditures to $175 billion to $185 billion, exceeding the expected $115 billion to $120 billion, indicating a proactive approach in AI despite challenges from slowing ad revenues.
- Changing Competitive Landscape: With Alphabet's ongoing investments and successes in AI, YouTube's user base has grown to 750 million, and Waymo's self-driving business is outpacing Tesla, suggesting a strengthening competitive advantage that may attract more investor interest.
- Mixed Market Reactions: Despite OpenAI and Anthropic's strong performance in AI, Microsoft's Copilot sales have been disappointing, highlighting investor concerns about its future growth and reflecting differing levels of confidence across companies.
See More
