Salesforce vs. ServiceNow: Which Agentic AI Stock Is Actually the Better Buy Right Now?
Salesforce and ServiceNow are racing to reestablish their competitive footing in the market by embracing agentic AI. ServiceNow's AI pivot is delivering results, but the stock is still nearly 60% below its high. Salesforce has aggressively rolled out agentic AI tools and …
Intelligence analysis by Llama
Salesforce and ServiceNow are competing to be the leader in agentic AI. ServiceNow's AI pivot is paying off, but the stock is still undervalued. Salesforce has a sticky ecosystem and is a better value at just over 18 times earnings.
Imagine you have a really smart robot that can help you with tasks. That's basically what agentic AI is. Salesforce and ServiceNow are trying to be the best at using this technology to help companies. ServiceNow is growing really fast, but its stock is still cheap. Salesforce is slower-growing, but its stock is a better value.
Analysis
A $60B Vote of Confidence
ServiceNow's AI pivot is delivering results, with the company guiding for $15.7 billion in subscription revenue this year and believing it will grow to at least $30 billion by 2030. AI will account for 30% of its annual contract value by then. The strong outlook hasn't saved the stock from the AI sell-off; shares are still nearly 60% below their high.
Why Cursor?
Salesforce is also one of the stickiest enterprise software products. It has become an ecosystem where companies can run their sales, marketing, customer service, and more. Salesforce has aggressively rolled out agentic AI tools and features, including Agentforce, which is rapidly growing. To date, its AI agents performed 3.8 billion discrete tasks as of the first quarter of fiscal year 2027 (ended April 30), and grew 111% from the prior quarter.
The Road Ahead
Investors should weigh both the opportunities and risks that AI technology presents to these companies. Paying a reasonable valuation for a stock is one of the best ways to protect your investment from the unknown. ServiceNow is clearly growing much faster than Salesforce, but the stock is also far more expensive. Analysts estimate that ServiceNow will grow earnings by an average 24.6% annually over the long term. That's great, but it's less exciting for investors when you're paying more than 56 times earnings for shares. Suppose AI doesn't go the way ServiceNow hopes, and its growth slows? The stock could fall a long way from that valuation. On the other hand, analysts see Salesforce growing earnings by an average of 16.1% annually moving forward. It's not nearly as fast, but the stock is a much better value at just over 18 times earnings.
Key points
- ServiceNow's AI pivot is delivering results, with the company guiding for $15.7 billion in subscription revenue this year and believing it will grow to at least $30 billion by 2030.
- Salesforce has aggressively rolled out agentic AI tools and features, including Agentforce, which is rapidly growing.
- ServiceNow is clearly growing much faster than Salesforce, but the stock is also far more expensive.
- Analysts see Salesforce growing earnings by an average of 16.1% annually moving forward, making it a better value at just over 18 times earnings.
If ServiceNow's AI pivot continues to pay off, the stock could see significant growth in the coming years. Additionally, Salesforce's sticky ecosystem and aggressive rollout of agentic AI tools and features could lead to increased revenue and earnings growth.
If AI technology continues to evolve and ServiceNow's growth slows, the stock could fall significantly. Additionally, if Salesforce's growth is slower than expected, the stock could also see a decline in value.
