On Friday, Wedbush analyst Dan Ives said Wall Street is misreading the impact of artificial intelligence on enterprise software.
AI Disruption Fears Spark Software Rout
Speaking on CNBC’s “Closing Bell,” Ives said investors are pricing in an unrealistic scenario in which AI tools rapidly replace traditional software platforms.
“The most disconnected trade I’ve ever seen in my career on Wall Street,” Ives said, referring to the sharp pullback in large-cap software stocks.
Shares of Salesforce Inc. (NYSE:CRM) and ServiceNow Inc. (NYSE:NOW) have faced pressure amid concerns that generative AI tools from firms such as Anthropic could automate high-value enterprise workflows and shrink software budgets.
Salesforce and ServiceNow shares are down over 20% in the past one month, according to Benzinga Pro.
Enterprise Software Moats Remain Intact
Ives pushed back on that narrative, arguing that enterprise customers remain deeply embedded in platforms like Salesforce and ServiceNow, with high switching costs and long-term contracts limiting near-term disruption.
He said AI monetization across major software firms remains in its early stages and could ultimately accelerate revenue growth rather than diminish it.
Earlier, strategists at JPMorgan said markets appear to be pricing in near-term AI disruption at unrealistic levels.
“We believe the balance of risks is increasingly skewed towards a rebound,” said Dubravko Lakos‑Bujas, Head of Global Markets Strategy.
Earlier this month, Ives restored Salesforce and ServiceNow to his AI-focused watchlist.
“We believe the sell-off in tech stalwarts Salesforce and ServiceNow are way overdone and both these tech players will be core participants in the AI Revolution,” he said then.
CRM is showing a weaker price trend across the short, medium, and long-term time frames, alongside weak value and momentum scores, according to data from Benzinga’s Edge Stock Rankings.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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