Guggenheim lifts Salesforce, arguing AI fears are being priced too harshly

Software stocks snapped higher on July 2 after Guggenheim upgraded three widely held names, arguing that investor worries about artificial intelligence becoming a “death knell” for the sector may be overdone. In a note carried by market coverage, the firm framed the recent drawdown as an opportunity, saying valuations imply many software companies could face long-lasting impairment from AI, a scenario Guggenheim does not see as the most likely outcome.

Salesforce, ServiceNow and Check Point were among the harder-hit companies in the prior selloff, according to the market report. The coverage said investors had been worried that AI-native players such as OpenAI and Anthropic could pressure the long-term growth prospects for traditional software vendors, pushing the companies’ shares down sharply before Guggenheim’s decision.

For Salesforce, which markets customer relationship management (CRM) software used by enterprises to manage sales, service and marketing workflows, Guggenheim set a $228 price target. The target, as described in the market write-up, implies more than 45% upside from the shares’ Tuesday close and follows the company’s recent period of weakness, including what the report characterized as its longest losing streak on record last month.

ServiceNow, a provider of enterprise workflow automation, was also upgraded. Guggenheim’s report put potential upside at about 26% for ServiceNow based on its Tuesday close, while Check Point, which sells cybersecurity software and services, received an upgrade framed as implying more than 40% upside. After the upgrade, the market coverage cited gains of roughly 4.9% for Salesforce, 4.6% for ServiceNow and 2.7% for Check Point, alongside a broader rise for a software-focused exchange-traded fund.

A key thread in Guggenheim’s argument was not that AI would have no impact, but that the market’s implied long-term damage may be too severe. The market report said the firm acknowledged AI-native companies could affect enterprise software, but suggested interpreting AI as a permanent threat to the category is, in effect, a “hallucination” rather than a base-case expectation.

Guggenheim’s stance reflects how quickly sentiment in enterprise technology can shift. When AI fears spread, investors often reprice forward growth assumptions and discount rates for the whole software group at once, even for businesses that already sell AI-assisted products or that embed automation into customer operations. Upgrades like this tend to focus on the gap between where the stock is trading and what the analyst believes is a more realistic scenario for adoption and revenue durability.

What Guggenheim did not detail in the market write-up is as important as what it did: the coverage did not attribute specific quarter-by-quarter forecasts or new product milestones to any of the three companies. Instead, the message centered on valuation, expectations, and the probability of an AI-driven, industry-wide impairment that would prevent software demand from recovering.