BofA Securities Initiates ServiceNow Buy, Reinstates Salesforce Underperform as Yields Hit 4.63%
Bank of America Securities initiated coverage on ServiceNow with a Buy rating and $130 target (37% upside) and reinstated Salesforce with an Underperform rating and $160 objective, flagging slowing AI monetization. Separately, its strategists noted 10-year yields at 4.63% and predicted a Fed hawkish pivot, delaying cuts until 2027.
1. BofA Initiates Coverage on ServiceNow
Bank of America Securities analyst Tal Liani launched coverage on ServiceNow with a Buy rating and $130 price target, implying 37% upside from its last close. He highlighted the company’s entrenched workflow automation across IT and customer processes and forecast 18–22% annual revenue growth through 2028 alongside 35–37% free cash flow margins.
2. Reinstates Salesforce Underperform Rating
The firm reinstated coverage on Salesforce with an Underperform rating and a $160 target, citing limited new customer growth, weakened upsell dynamics, and narrow AI monetization from Agentforce, which has 23,000 customers but reaches only 9–10% of the base. Analyst Liani warned that AI-driven automation may pressure seat-based subscription growth.
3. Strategists Forecast Hawkish Fed Pivot
Bank of America strategists observed 10-year Treasury yields climb to 4.63% on Kevin Warsh’s first day as Fed chair, signaling bond market impatience with an easing bias. They projected that persistent high yields and geopolitical risks could compel a hawkish shift, postponing the first rate cuts from 2026 into 2027.