KeyBanc downgraded ServiceNow (NOW) to Sector Weight from Overweight. While the firm has been thrilled with ServiceNow all year, it now feels that the rise of Agents in the broader software sector may chip into the company’s early AI leadership and differentiation, add the potential cuts to government spending, and there are potential fundamental risks to expectations at a time when the relative valuation is at the highest level in close to a decade. The additional risks and little upside potential to multiple expansion relative to peers result in a downgrade, the analyst tells investors in a research note.
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