Investors are still nervous about the software-as-a-service (SaaS) sector and the impact artificial intelligence (AI) will have on it. However, these beaten-down stocks could be the most underrated AI plays in the second half of this year and beyond.
Agentic AI is just starting to take off, and there is a large opportunity for software companies to begin playing a major role in this trend. Let’s look at two of the best-positioned SaaS stocks for this right now.
ServiceNow
While Nvidia is the backbone of AI infrastructure, ServiceNow (NOW 0.64%) serves as the central nervous system of organizations’ IT infrastructure. It monitors its customers’ complete software stacks and is deeply integrated with their data and workflows. It’s an ingrained, essential system that is highly unlikely to be disrupted by AI and more likely to serve as an integral part of the AI evolution that organizations are starting to embark on.
Today’s Change
(-0.64%) $-0.68
Current Price
$106.29
Key Data Points
Market Cap
$110B
Day’s Range
$104.75 – $109.79
52wk Range
$81.24 – $211.48
Volume
808.5K
Avg Vol
26.8M
Gross Margin
76.56%
The company has seen solid growth from AI, with AI commitments now expected to hit $1.5 billion this year, a 50% increase from its prior guidance, showing the rapid adoption of its AI offerings. Its move to a hybrid pricing model has been paying early dividends, with 50% of its new business now coming from non-seat-based pricing, including from tokens and connectors.
ServiceNow also has a huge opportunity with its AI Control Tower, its new agentic AI orchestration platform. AI agents just can’t be unleashed into a company’s ecosystem without strict guardrails, governance, and constant monitoring, and it has a system that can provide that. With agentic AI still in the very early innings, the company looks like it has the ingredients to be a big winner on the software side.
Image source: Getty Images.
Salesforce
Another SaaS company well positioned for agentic AI is Salesforce (CRM 2.34%). The company has made some smart under-the-radar moves to turn its platform into an ideal environment to launch AI agents. This includes its Data 360 product, which uses zero-copy technology to grab data from data warehouses, like Snowflake, and cloud computing providers without the expense or cost of transferring it. Its acquisition of Informatica, meanwhile, gave it the technology to clean, organize, and govern this data. Combined, this makes its platform an important master of records for AI agents.
Today’s Change
(-2.34%) $-4.11
Current Price
$171.24
Key Data Points
Market Cap
$144B
Day’s Range
$170.03 – $175.56
52wk Range
$163.52 – $276.80
Volume
536.9K
Avg Vol
14.1M
Gross Margin
75.12%
Dividend Yield
0.96%
Salesforce has been seeing solid growth from its Agentforce offering, but its overall size is still so small that it’s not yet meaningfully moving the needle. However, with agentic AI starting to take off, that should eventually change, and it should become a significant driver down the road.
Geoffrey Seiler has positions in Salesforce and ServiceNow. The Motley Fool has positions in and recommends Nvidia, Salesforce, ServiceNow, and Snowflake. The Motley Fool has a disclosure policy.