Investment firm KeyBanc Capital Markets made ratings changes to several enterprise software companies on Monday, including downgrading ServiceNow (NOW) and Adobe (ADBE).
ServiceNow
Analyst Jackson Adler lowered his rating on ServiceNow to Underweight from Sector-Weight and put a $775 price target on the stock, citing some “worrying trends in IT back-office employment data.”
“ServiceNow’s own AI products include a hybrid monetization structure that should mitigate some of the headwinds that would come from seat-count pressure, but this has not kept other SaaS sub-sectors afloat when this narrative has come for them,” Adler wrote in a note to clients. “Further, we believe ServiceNow’s position and perception as an AI orchestration winner may cede ground to Microsoft in 2026. Also, while the government headwinds have not been as bad as feared a year ago, the scrutiny of spend in that arena is probably far from over.”
Adobe
Adobe was cut to Underweight from Sector-Weight and Adler put a $310 price target on the stock, noting that the “either/or” trade off of growth or margin suggests that any kind of outperformance may be difficult in the future.
“This downgrade is less about absolutes and more about the potential for share outperformance,” Adler wrote. “The Company reported its 4Q25 last Wednesday and produced solid upside across the board, but the guidance on ARR called for flat net-new ARR in 2026, while EBIT margins were forecast to contract. This, in our opinion, was about as good of an outlook as investors could ask for at this juncture, and the stock hardly budged. We are taking this as a signal that the competitive pressures we have been picking up from our survey work and channel work through the year will continue to weigh on shares and the multiple. We expect competition from many sources to keep a lid on shares and fundamental upside in 2026 Adobe is being squeezed from both sides of the idea-to-publish flow, and, in some cases, the squeezers are the same company. Content generation models being developed by Alphabet, Meta, or OpenAI are landing on digital real estate that those companies either own today or, in the case of OpenAI, may own in the future. We believe this two-front defense, along with the traditional competitors like Figma and Canva, will make 2026 another year when fundamental upside from AI is difficult to come by.”
Akamai
Akamai (AKAM) was upgraded to Overweight from Underweight and the price target was raised to $115 from $66, as Adler admitted he was wrong on the content delivery provider.
“We were wrong early on AKAM,” Adler wrote. “The stock returned 12.2% from our launch on 6/5/2025 to last Thursday against the IGV of 4.9%, and while we remain skeptical on the Delivery segment of the Company’s revenue stream, we believe revenue has the opportunity to accelerate as more of the business shifts toward compute. The compute business, particularly through its partnership with Nvidia for GPUs, is not dependent on AI inference at the near-edge being a thing in 2026, and we lay out our case against that reality in our thematic piece, but we do believe that simply having this GPU capacity in its repertoire could drive revenue acceleration from AI companies searching for any capacity they can get their hands on.”
Fastly
Fastly (FSLY) was upgraded to Overweight from Sector-Weight, as Adler said the company has a product, financial and management story going for it.
“Upon reflection, we feel that Fastly has potential on the long side,” the analyst wrote. “The Company’s security portfolio has expanded from one to five products in the last couple of years, and the architect of that product expansion is Kip Compton, the former Chief Product Officer who is now CEO. We expect Mr. Compton to continue to bolster the existing products and expand into new areas of security, while, at the same time, operational rigor in the sales force under Go-to-Market President Scott Lovett improves distribution. Finally, Mr. [CFO Rich] Wong’s focus on cash flow, along with shoring up the balance sheet with a recent convertible offering, will be more accretive to shareholders than the prior regime.”
Asana
Asana (ASAN) was upgraded to Overweight from Sector-Weight, along with an $18 price target, as the new management is likely to focus more on execution than past regimes.
“In our opinion, new CEO Dan Rogers and still relatively new CFO Sonalee Parekh will usher in a new era of focus on execution,” Adler wrote. “A multiplicity of growth sources gives us some confidence in the top line AI has taken up a lot of the oxygen in Asana discussions of late, and, yes, we believe it could provide a tailwind to revenue growth if it becomes material, but it’s a more traditional software motion that is driving our conviction.”
ZoomInfo
ZoomInfo (GTM) was upgraded to Overweight to Sector Weight on the belief that the worst has passed for the company.
“It appears to us that [the] guidance strategy of manufacturing large annual and quarterly beats will remain intact in 2026, and so we feel finding downside will be more limited,” Adler wrote. “Toss in a continued commitment to retiring shares, and we feel that even for low-single-digit top-line growth, GTM can perform in line with our coverage and with software next year.”