Rothschild has concluded that investor concern about disruption from frontier AI labs has driven enterprise software valuations down to levels the firm describes as historically low. While the brokerage acknowledges that AI could exert near-term pressure on unit pricing and has trimmed revenue forecasts and some price targets to reflect that risk, it maintains that established vendors retain deep data and business-logic advantages that make them resilient to displacement.
In its sector review, Rothschild stresses that the market has likely over-corrected, creating what the firm sees as meaningful value opportunities across enterprise software. The firm adjusted its expectations for top-line and pricing dynamics to account for potential AI-related headwinds, but stopped short of abandoning firms with entrenched positions and complex product ecosystems.
Intuit: Upgrade to Buy
Rothschild upgraded Intuit from Neutral to Buy and lifted its price target to $700 from $670, implying about 59% upside from the Wednesday close cited by the firm. The brokerage points to QuickBooks and TurboTax as products that are especially resistant to AI-led disruption because they are built on extensive regulatory complexity, domain-specific knowledge and network effects that embed valuable data and business logic.
The firm expects Intuit to generate 13% annual revenue growth and 15% annual free cash flow growth over the coming five years. On Rothschild's revised 2027 forecasts, Intuit is valued at 5.8x enterprise value-to-sales, 16.5x enterprise value-to-free cash flow and 18.6x non-GAAP price-to-earnings. Based on current multiples, the stock implies a terminal free cash flow growth rate of 2.2% annually, down from an implied 7% at the start of 2025, the firm calculates.
Rothschild also noted Intuit's latest reported results, with second-quarter fiscal 2026 revenue of $4.651 billion, up 17.4% year-over-year, and that the company reaffirmed guidance for the fiscal year.
SAP: Reinforced Buy Rating
The brokerage reiterated a Buy recommendation on SAP while trimming the price target to 290 from 300, which it says leaves about 57% upside. Rothschild described SAP as the most resilient software vendor in its coverage to the risks posed by AI, citing the company's control of context-rich, unique data, deep regulatory and platform dependencies, and the complex migration paths customers would face.
According to Rothschild, even if an "AI Intelligence Layer" were to gain traction, it would need to tap SAP's embedded business logic to execute enterprise resource planning workflows, reinforcing SAP's central role. The firm projects 11% annual revenue growth and 17% annual free cash flow growth for SAP over a five-year horizon. In its updated 2026 outlook, SAP trades at 5.1x enterprise value-to-sales and 20.2x enterprise value-to-free cash flow, per Rothschild's calculations.
The firm also reported SAP's shareholder return plans, noting that the company intends to distribute about 2.92 billion in dividends based on 2025 earnings, proposing a dividend of 2.50 per share, which represents a 6.4% increase versus the prior year.
ServiceNow: Buy Maintained
Rothschild kept a Buy rating on ServiceNow but lowered its price target to $215 from $230, a level the firm says equates to roughly 98% upside from the referenced Wednesday closing price. The brokerage highlights ServiceNow's deep platform integrations, its knowledge graph of IT workflows and a distinct Configuration Management Database as features that make the company difficult to displace.
The firm also identified new growth avenues, such as opportunities in Operational Technology, that should complement the core business. Rothschild's five-year projections for ServiceNow call for 18% annual revenue growth and 20% annual free cash flow growth. The firm additionally cited recent product moves from ServiceNow: the launches of Autonomous Workforce and EmployeeWorks, two AI-powered solutions, and the FedRAMP authorization for the Moveworks platform for use by U.S. federal agencies.
Outlook and Valuation Context
Overall, Rothschild's analysis balances a more conservative near-term revenue posture against a view that the strategic advantages held by incumbent enterprise software providers - including regulatory entanglements, unique datasets and embedded business logic - should sustain pricing power and cash flow over time. The firm believes shares have materially discounted that endurance, which is why it retains Buy positions on the three featured names despite downward adjustments to some targets and forecasts.
Investors should note that Rothschild explicitly altered revenue forecasts and price targets to capture the possibility of AI-related pricing pressure. The brokerage's assessments rest on a mix of company-specific metrics, revised multi-year growth projections and updated valuation multiples on its revised forecast horizons.