Apps & Software

Goldman Sachs Has 6 Software Superstars for 2023 With 30% to 150% Upside Potential


This is yet another software giant that has been cut in half over the past year. ServiceNow Inc. (NYSE: NOW) provides enterprise cloud computing solutions that define, structure, consolidate, manage and automate services for enterprises worldwide.

The company operates the Now platform for workflow automation, artificial intelligence, machine learning, robotic process automation, performance analytics, electronic service catalogs and portals, configuration management systems, data benchmarking, encryption, and collaboration and development tools.

ServiceNow also provides information technology (IT) service management applications; IT service management product suite for enterprise’s employees, customers and partners; IT business management product suite; IT operations management product that connects a customer’s physical and cloud-based IT infrastructure; IT Asset Management to automate IT asset life cycles; and security operations that connects with internal and third party. In addition, it offers governance, risk and compliance products to manage risk and resilience; human resources, legal and workplace service delivery products; safe workplace applications; customer service management products; and field service management applications.

Goldman Sachs has set its price objective for the Conviction List stock at $640. The consensus target is just $552.94. ServiceNow stock ended Friday’s session at $341.76 a share, so hitting the Goldman Sachs target would be an 87% gain.


Surprisingly, Warren Buffett has shares of this top software company in the Berkshire Hathaway portfolio. Snowflake Inc. (NYSE: SNOW) provides cloud-based data platforms in the United States and internationally. Its platform offers Data Cloud, an ecosystem that enables customers to consolidate data into a single source of truth to drive meaningful business insights, build data-driven applications and share data. The platform is used by various organizations of various sizes in a range of industries.

Economic worries and tightening budgets are accelerating a move to consumption pricing, which charges software customers based on how much they use a product rather than a recurring annual or multiyear subscription fee. The model that has been popularized by Snowflake is being adopted by a growing number of software makers.

The Goldman Sachs target price of $200 is less than the $220.51 consensus target on Snowflake stock. Still, there is 31% or so upside from the $152.38 close on Friday to the Goldman Sachs target.

With earnings still in front of all these top companies, it makes sense to just consider partial positions now. The potential for the market to trade lower, combined with the fact that any earnings miss or poor forward guidance could cause any of these sector leaders to take a big hit.

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