ServiceNow and Salesforce Fall 5%: Is the Market Mispricing Both NOW and CRM?

"The bear case is evident: if AI agents can autonomously complete tasks that previously required licensed software workflows, the per-seat, per-module pricing structures that companies like ServiceNow and Salesforce depend on face structural pressure."

"ServiceNow's platform governs workflows, audits them, integrates them across enterprise systems, and provides the connective tissue that AI agents actually need to function at scale."

"McDermott's answer was yes, and the company's platform positioning supports that confidence."

"Salesforce is making a similar argument with Agentforce. The platform reached an $800 million annual run rate, growing 169% year over year."

ServiceNow and Salesforce stocks have both dropped around 5%, reflecting investor anxiety over AI's impact on traditional software licensing. Despite strong earnings reports, both companies face significant year-to-date declines, with ServiceNow down 31% and Salesforce down 30%. The fear is that AI agents could replace the need for licensed software workflows, threatening the pricing structures of these companies. However, ServiceNow's CEO argues that AI's rise actually enhances the need for their infrastructure, while Salesforce's Agentforce platform shows significant growth.

Read at 24/7 Wall St.