Truist Bangs the Drum for Software Stocks Snowflake and ServiceNow

Infrastructure software stocks experienced a turbulent first half of the year. Concerns over valuations weighed on the sector during the first quarter while further AI momentum in Q2 created a widening divide between companies viewed as AI leaders and those seen as falling behind.

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Looking ahead, Truist analyst Miller Jump expects that split between the “AI winners and AI losers” to persist through the second half of the year. As enterprise AI adoption accelerates and organizations become more disciplined about AI spending, he believes vendors that provide enterprise-wide data and context will be among the biggest beneficiaries.

Against that backdrop, Jump highlights two companies he believes are particularly well positioned. “We see Snowflake (NYSE:SNOW) as one of the YTD winners that could continue to move higher on this tailwind, and we believe that ServiceNow (NYSE:NOW) can stake their claim for a return to the winners bucket with their broad platform presence and critical enterprise context offering,” the analyst said.

In contrast to many software names, SNOW stock has outperformed this year, showing year-to-date gains of 22%. Jump believes the company can continue building on that momentum, supported by CoCo, its AI coding agent. Conversations with ecosystem partners at Snowflake Summit indicated that the coding assistant is helping accelerate customer migrations, while the company’s security and governance capabilities are driving adoption in highly regulated industries. Following discussions at both Snowflake Summit and Databricks’ Data + AI Summit, Jump believes both vendors have ample room to grow given the sizeable opportunity in enterprise data spending.

To this end, Jump rates SNOW stock a Buy, while his $300 price target points toward 12-month returns of 12%. (To watch Jump’s track record, click here)

ServiceNow has had a far more challenging year, with its shares down 29%. However, among the “perceived laggards,” Jump believes it has the potential to improve investor sentiment during the second half. Although questions remain about its long-term competitive positioning in an AI-driven software landscape, he continues to view the company as a beneficiary of enterprise platform consolidation. While large-scale enterprise AI deployments have generally progressed more slowly than AI-native implementations, customers and partners have indicated that ServiceNow’s AI Control Tower is emerging as a natural governance layer that should benefit as more AI workloads move into production.

More broadly, Jump argues that platform companies are best equipped to navigate the industry’s AI transition. Their diverse product portfolios provide multiple avenues for growth, limiting the impact of pricing changes in any individual offering. As enterprises consolidate vendors around AI initiatives, broad platforms also gain more opportunities to expand customer spending. “ServiceNow’s continued expansion into adjacent functions such as HR, customer service, and CRM illustrates how platform breadth can help offset changes in traditional seat-based economics,” Jump added.

As such, Jump maintained a Buy rating on NOW shares but raised his price target from $120 to $130, implying the stock will gain 19.5% over the coming months.

Jump’s colleagues are also mostly on board here, with both stocks claiming Strong Buy consensus ratings. SNOW’s average price target stands at $299.06, mirroring Jump’s objective. (See SNOW stock forecast)

Meanwhile, NOW stock is expected to appreciate by 29.5%, considering the average target clocks in at $140.91. (See NOW stock forecast)