ServiceNow's stock dropped over 10% following reports of a potential $7 billion acquisition of cybersecurity startup Armis, outside its core competencies, amid sector volatility and concerns over AI's impact on demand. Despite the decline, the stock's rare large move suggests a market overreaction, and some analysts see buying opportunities in high-quality tech stocks during downturns.
Wedbush Securities' Dan Ives has raised Palantir's price target to $75, citing 2025 as a pivotal year for AI in the software sector. Palantir's stock has surged 288% YTD, driven by significant contracts and its first profitable year. Despite this growth, some investors are cautious about its high valuation and retail investor base. Ives also upgraded Elastic NV and Snowflake Inc, reflecting confidence in AI's potential impact on the software industry.
Microsoft's upcoming earnings report is highly anticipated as the company's AI initiatives, including OpenAI and Copilot technology, are expected to impact its financial performance. Analysts are optimistic about the potential for AI to drive revenue growth, particularly in the Azure cloud-computing business and software products. However, there are concerns about the impact of AI investments on gross margins. The report is expected to shed light on Microsoft's performance in key segments such as productivity and business processes, More Personal Computing, and Intelligent Cloud, with a focus on Azure's revenue growth. The outcome of Microsoft's earnings could have broader implications for the entire software sector.
