ServiceNow and Salesforce face AI agent competition concerns

The launch of OpenAI’s GPT-6 Astra has sparked concerns regarding the future of Software-as-a-Service (SaaS) companies. On September 8, Salesforce and ServiceNow saw stock declines of approximately 4% and 5%, respectively, as investors weighed the potential for general AI agents to compete with specialized software. The Astra model is designed to operate software, which could allow companies to reduce expensive seat licenses and custom workflow code by using agents to complete tasks across various applications.

Despite these fears, analysts remain active on ServiceNow. Needham & Company LLC recently raised its price target for ServiceNow from $115.00 to $155.00, maintaining a “buy” rating. Other major institutions, including Goldman Sachs and Citigroup, have also issued positive ratings or reiterated “market outperform” stances.

ServiceNow’s financial position includes second-quarter subscription revenue of $3.88 billion and AI-related annual contract value exceeding $1 billion. However, institutional movement remains mixed; while some firms like Norges Bank have taken positions, Corient Private Wealth LP reduced its stake in the company by 7.3% during the second quarter.