Key Points
ServiceNow is looking to become an agentic AI orchestration leader.
Salesforce has created a great launching pad for AI agents.
- 10 stocks we like better than ServiceNow ›
2026 has not been a good year for software-as-a-service (SaaS) stocks. The sector has been crushed by fears that artificial intelligence (AI) is going to disrupt the industry. That has led to a major sell-off across the board for SaaS stocks in what has been referred to as the "SaaSpocalypse."
While SaaS stocks struggled in 2025, the sector took a huge hit this year following Anthropic's release of Claude Code. Suddenly, agentic coding tools were here, and the potential to quickly create new software through AI was a reality. With the barrier to entry for software creation seemingly gone, investors punished SaaS companies across the board.
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What agentic coding tools do well is quickly create user interfaces and core features. What it doesn't handle is long-term maintenance, governance, compliance, and future integrations. It's never been that difficult for an organization to create its own proprietary software, but the maintenance and responsibility of keeping up with regulatory, application programming interface (API), and cybersecurity changes generally don't make it worthwhile.
At the same time, AI agents are only as good as the data they have access to within an organization. Instead of replacing the SaaS companies that are tightly integrated with their customers' data and workflows, it makes much more sense for these companies to bring AI features to their customers.
This is why both ServiceNow (NYSE: NOW) and Salesforce (NYSE: CRM), regardless of their recent price action, both look well positioned to be long-term AI winners, not losers. However, the question is which stock looks like the better buy in the age of agentic AI? Let's take a closer look at both.
ServiceNow: Becoming an AI orchestration platform
ServiceNow's platform just doesn't sit on top of data; it's basically the internal plumbing information that technology (IT) departments use to run their organizations' entire software stacks. Its configuration management database (CMDB) is deeply embedded within its customers' workflows, becoming an essential system of record built on top of years of proprietary business logic, audit trails, and custom security permissions. It's not something that can easily be ripped and replaced, or replicated.
With the introduction of its AI Control Tower and recent cybersecurity acquisitions of Armis and Veza to bolster its position around rights permissions and asset visibility, ServiceNow is looking to become a leader in agentic AI orchestration. As AI agents begin to proliferate, this has the potential to be a huge growth driver for the company.
Following a post-earnings sell-off, the stock trades at a forward price-to-sales (P/S) multiple of 6 and a forward price-to-earnings (P/E) multiple of 22, while growing its revenue by around 20%.
Salesforce: The ideal launching pad for agentic AI
Few SaaS companies have done as good a job of preparing themselves for agentic AI as Salesforce. Instead of just adding AI tools on top of its software, the company actively went out and positioned its platform to become an ideal AI agent launching pad. As noted above, AI agents are only as good as the data they have access to, and Salesforce has made sure it can be the master of its customers' data.
This starts with the introduction of its Data 360 solution, which uses zero-copy technology to bring in data from cloud providers and data warehouses, like Snowflake, without having to transfer it to its system. It then acquired master data management company Informatica to be able to clean up and structure this data, setting up its Agentforce platform to be one of the leading agentic AI solutions.
From a valuation standpoint, the stock trades at a forward P/S multiple of 3.7 and a forward P/E of 14. It is projecting low double-digit revenue growth over the next several years.
Image source: The Motley Fool.
The verdict
I like both stocks and own both. However, if I were to choose only one, I'd pick ServiceNow. I think the company is more embedded with its customers and that the opportunity it has with AI orchestration could be huge. Meanwhile, it is the faster grower and is still trading at a great valuation.
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Geoffrey Seiler has positions in Salesforce and ServiceNow. The Motley Fool has positions in and recommends Salesforce, ServiceNow, and Snowflake. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
