Shares of Salesforce and ServiceNow moved significantly higher on Wednesday, fueled by a positive market reaction to Guggenheim upgrading both companies to a buy rating. ServiceNow saw gains exceeding 5% during the session, while Salesforce's stock rose close to 4%.

The rating upgrade from Guggenheim sends a crucial message: artificial intelligence is not a death knell for established software firms. On the contrary, both companies are actively integrating AI technology, turning a potential threat into a powerful growth driver. The report highlights that the valuations for both firms have now fallen to attractive levels, presenting an entry opportunity for investors.

From a fundamental perspective, both companies are demonstrating strong capabilities in monetizing AI. Salesforce's AI platform, Agentforce, has delivered impressive results, with its annual recurring revenue surging to $8 billion, a 169% year-over-year increase. The platform has already processed over 240 million agent work units and 19 trillion tokens, underscoring robust market demand. Salesforce has also recently announced an additional $25 billion stock repurchase program, signaling management's confidence in the company's long-term value.

For its part, ServiceNow is positioning itself as a central AI governance hub for enterprises. Through new offerings like Workflow Data Fabric and AI Control Tower, it is building the foundational architecture for managing autonomous AI agents. In its most recent earnings report, ServiceNow's subscription revenue grew 21% year-over-year, and its current remaining performance obligation increased by 25%, pointing to strong future demand. Furthermore, deep partnerships with firms like Experian further solidify the indispensable nature of its platform.

Although the market previously sold off shares of both companies over fears that AI would disrupt traditional software models, institutions like Wedbush believe these concerns are disconnected from the long-term potential for AI monetization. As the integration between native AI applications and traditional software deepens, the core value of leading companies that control critical customer relationships and workflow entry points may actually be amplified by AI enablement.