SaaS Sector Faces Disruption from AI Innovations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 30 2026
0mins
Source: Fool
- SaaS Sector Crisis: In 2026, SaaS stocks faced significant sell-offs due to the rise of AI technologies, leading to a widespread market phenomenon dubbed the 'SaaSpocalypse,' which severely impacted valuations and investor confidence across the industry.
- ServiceNow's AI Strategy: ServiceNow aims to become a leader in AI orchestration by launching its AI Control Tower and acquiring companies like Armis and Veza, which is expected to drive around 20% revenue growth and solidify its core position in customer data management.
- Salesforce's Market Positioning: Salesforce has strategically positioned itself as an ideal AI agent launching pad by introducing its Data 360 solution and acquiring Informatica, ensuring its dominance in customer data management, with projected low double-digit revenue growth over the coming years.
- Investment Choice Analysis: While both companies show strong potential for AI development, analysts suggest that ServiceNow's deeper customer integration and opportunities in AI orchestration make it a more attractive investment choice at a reasonable valuation.
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Analyst Views on NOW
Wall Street analysts forecast NOW stock price to rise
32 Analyst Rating
30 Buy
2 Hold
0 Sell
Strong Buy
Current: 91.490
Low
172.00
Averages
222.81
High
263.00
Current: 91.490
Low
172.00
Averages
222.81
High
263.00
About NOW
ServiceNow, Inc. provides an artificial intelligence (AI) platform for business transformation. The Company’s AI platform connects people, processes, data, and devices to increase productivity and maximize business outcomes. Its intelligent platform, the Now Platform, is a cloud-based solution that helps enterprises and organizations across public and private sectors digitize workflows. The workflow applications built on the Now Platform are organized into four primary areas: Technology, CRM and Industry, Core Business and Creator. Its products include IT Service Management, IT Operations Management, HR Service Delivery, ServiceNow AI Agents, AI Experience, Build Agent, ServiceNow AI Control Tower, AI Agent Fabric, RaptorDB, Workflow Data Fabric, Workplace Service Delivery, ServiceNow Platform Encryption, Telecommunications Service Operations Management, and others. The Company also offers identity security, helping organizations secure access across the enterprise.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
ServiceNow Expands AI Control Tower Capabilities
- AI Control Tower Expansion: On May 5, 2026, ServiceNow expanded its AI Control Tower, introducing capabilities to discover, observe, govern, secure, and measure AI systems across enterprise environments, enhancing corporate control over AI compliance.
- Multi-Dimensional Control: The platform now offers customers control across five dimensions, including runtime observability through Traceloop and security controls via Veza, ensuring identity governance and permission management for AI systems and agents.
- Security and Risk Integration: On the same day, ServiceNow launched Autonomous Security & Risk, integrating Armis and Veza to govern AI agents, identities, and connected assets, thereby enhancing corporate security and compliance.
- Audit Traceability: Veza's access graph helps enterprises map access permissions and their changes, fulfilling auditors' and regulators' traceability requirements, thus improving transparency and control in AI compliance efforts.
See More
ServiceNow Sets Ambitious Revenue Targets at Analyst Day
- Financial Target Announcement: At its Financial Analyst Day, ServiceNow announced a target of $30 billion in subscription revenue by 2030, with a projected compound annual growth rate of 17.5% from 2027 to 2030 based on the midpoint of 2026 guidance, reflecting the company's confidence in future growth.
- Profitability Benchmark: The company aims to achieve a rule of 60 or higher by 2030, where the sum of revenue growth rate and profit margin equals 60 or more, a target viewed positively by KeyBanc as it strikes a balance between aspirational and achievable goals.
- Analyst Ratings Overview: According to ratings compiled by CNN from 49 analysts, 90% rated ServiceNow as a Buy, with an average price target of $140, indicating a potential upside of 52.16% from the current price of $92.01, showcasing market optimism regarding its future performance.
- AI Partnership Expansion: ServiceNow's partnership with NVIDIA has expanded to include data centers, introducing Project Arc, which aims to autonomously complete complex tasks on employee desktops through the ServiceNow AI Control Tower, thereby enhancing enterprise AI governance and strengthening its competitive edge in digital business.
See More
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- Support from Employment Data: U.S. nonfarm payrolls for April increased by 115,000, surpassing expectations of 65,000, with March figures revised up to 185,000, indicating resilience in the labor market and further boosting stock prices.
- Decline in Consumer Confidence: The University of Michigan's May consumer sentiment index fell to a record low of 48.2, below the expected 49.5, highlighting economic uncertainty that could impact future consumer spending.
- Oil Market Volatility: Iran's seizure of an oil tanker in the Strait of Hormuz led to a rise in WTI crude prices, with expectations that this incident will affect global oil supply, potentially causing further price fluctuations.
See More
Sands Capital Management's Strategic Moves in Q1 2026
- Position Increases: Frank Sands increased his stake in Spotify Technology SA by 324,378 shares, bringing the total to 1,794,226 shares, representing a 22.07% increase, which impacts the current portfolio by 0.62% with a total value of approximately $870 million, indicating confidence in the company's growth potential.
- Significant Additions: The stake in Carpenter Technology Corp was raised by 201,593 shares, totaling 823,277 shares, reflecting a 32.43% increase with a total value of $324 million, showcasing Sands Capital's optimistic outlook on the industry's recovery.
- Complete Exits: Frank Sands fully exited 8 holdings in Q1, including iRhythm Holdings Inc, selling 1,699,645 shares, resulting in a -0.92% impact on the portfolio, indicating a reassessment of the company's future prospects.
- Position Reductions: Among 48 stocks, ServiceNow Inc saw a reduction of 3,811,393 shares, a staggering 99.18% decrease, impacting the portfolio by -1.78%, reflecting a cautious stance on the company's future performance.
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- Technology Definition: Agentic AI is considered the next stage in artificial intelligence, surpassing commonly used chatbots by providing more effective answers and solutions to complex problems, thereby enhancing user experience and operational efficiency.
- Industry Impact: The rise of agentic AI will enable businesses to leverage advanced automation and intelligent solutions, significantly improving operational efficiency and reducing costs, which can provide a competitive edge in the market.
- Future Outlook: The widespread adoption of agentic AI is likely to trigger a technological revolution, fostering innovation and transformation across various industries, prompting companies to strategically position themselves to seize this potential market opportunity.
See More
US Stocks Rise, Nasdaq Hits Record High
- Strong Employment Data: US nonfarm payrolls rose by 115,000 in April, exceeding expectations of 65,000, while March figures were revised up to 185,000, indicating labor market resilience that supports stock market gains.
- Declining Consumer Confidence: Despite rising stock prices, the University of Michigan's May consumer sentiment index fell by 1.6 to a record low of 48.2, reflecting consumer concerns about the economic outlook, which could negatively impact future spending.
- Chip Stocks Lead Gains: Chipmakers like Micron and Qualcomm saw stock prices rise over 8%, driving the overall market higher, demonstrating the strong performance of tech stocks in the current market environment, although weakness in software stocks limited gains in the Dow.
- Oil Price Volatility Impact: WTI crude prices edged up slightly due to Iran seizing an oil tanker in the Strait of Hormuz, complicating market expectations for future oil prices, which may influence investment decisions in related sectors.
See More
ServiceNow Expands AI Control Tower Capabilities
- AI Control Tower Expansion: On May 5, 2026, ServiceNow expanded its AI Control Tower, introducing capabilities to discover, observe, govern, secure, and measure AI systems across enterprise environments, enhancing corporate control over AI compliance.
- Multi-Dimensional Control: The platform now offers customers control across five dimensions, including runtime observability through Traceloop and security controls via Veza, ensuring identity governance and permission management for AI systems and agents.
- Security and Risk Integration: On the same day, ServiceNow launched Autonomous Security & Risk, integrating Armis and Veza to govern AI agents, identities, and connected assets, thereby enhancing corporate security and compliance.
- Audit Traceability: Veza's access graph helps enterprises map access permissions and their changes, fulfilling auditors' and regulators' traceability requirements, thus improving transparency and control in AI compliance efforts.
See More
ServiceNow Sets Ambitious Revenue Targets at Analyst Day
- Financial Target Announcement: At its Financial Analyst Day, ServiceNow announced a target of $30 billion in subscription revenue by 2030, with a projected compound annual growth rate of 17.5% from 2027 to 2030 based on the midpoint of 2026 guidance, reflecting the company's confidence in future growth.
- Profitability Benchmark: The company aims to achieve a rule of 60 or higher by 2030, where the sum of revenue growth rate and profit margin equals 60 or more, a target viewed positively by KeyBanc as it strikes a balance between aspirational and achievable goals.
- Analyst Ratings Overview: According to ratings compiled by CNN from 49 analysts, 90% rated ServiceNow as a Buy, with an average price target of $140, indicating a potential upside of 52.16% from the current price of $92.01, showcasing market optimism regarding its future performance.
- AI Partnership Expansion: ServiceNow's partnership with NVIDIA has expanded to include data centers, introducing Project Arc, which aims to autonomously complete complex tasks on employee desktops through the ServiceNow AI Control Tower, thereby enhancing enterprise AI governance and strengthening its competitive edge in digital business.
See More
U.S. Stocks Close Higher, Nasdaq Hits Record High
- Strong Market Performance: The S&P 500 rose by 0.84% and the Nasdaq 100 increased by 2.35%, reaching record highs, reflecting market optimism driven by robust corporate earnings despite concerns over the Iran conflict.
- Support from Employment Data: U.S. nonfarm payrolls for April increased by 115,000, surpassing expectations of 65,000, with March figures revised up to 185,000, indicating resilience in the labor market and further boosting stock prices.
- Decline in Consumer Confidence: The University of Michigan's May consumer sentiment index fell to a record low of 48.2, below the expected 49.5, highlighting economic uncertainty that could impact future consumer spending.
- Oil Market Volatility: Iran's seizure of an oil tanker in the Strait of Hormuz led to a rise in WTI crude prices, with expectations that this incident will affect global oil supply, potentially causing further price fluctuations.
See More
Sands Capital Management's Strategic Moves in Q1 2026
- Position Increases: Frank Sands increased his stake in Spotify Technology SA by 324,378 shares, bringing the total to 1,794,226 shares, representing a 22.07% increase, which impacts the current portfolio by 0.62% with a total value of approximately $870 million, indicating confidence in the company's growth potential.
- Significant Additions: The stake in Carpenter Technology Corp was raised by 201,593 shares, totaling 823,277 shares, reflecting a 32.43% increase with a total value of $324 million, showcasing Sands Capital's optimistic outlook on the industry's recovery.
- Complete Exits: Frank Sands fully exited 8 holdings in Q1, including iRhythm Holdings Inc, selling 1,699,645 shares, resulting in a -0.92% impact on the portfolio, indicating a reassessment of the company's future prospects.
- Position Reductions: Among 48 stocks, ServiceNow Inc saw a reduction of 3,811,393 shares, a staggering 99.18% decrease, impacting the portfolio by -1.78%, reflecting a cautious stance on the company's future performance.
See More
Agentic AI Market Potential Estimated at $4 Trillion
- Market Size Estimate: Analysts at William Blair project the total addressable market for the agentic AI industry to reach approximately $4 trillion, a figure that underscores the immense expectations surrounding this technology and its potential to drive rapid growth for related companies.
- Technology Definition: Agentic AI is considered the next stage in artificial intelligence, surpassing commonly used chatbots by providing more effective answers and solutions to complex problems, thereby enhancing user experience and operational efficiency.
- Industry Impact: The rise of agentic AI will enable businesses to leverage advanced automation and intelligent solutions, significantly improving operational efficiency and reducing costs, which can provide a competitive edge in the market.
- Future Outlook: The widespread adoption of agentic AI is likely to trigger a technological revolution, fostering innovation and transformation across various industries, prompting companies to strategically position themselves to seize this potential market opportunity.
See More
US Stocks Rise, Nasdaq Hits Record High
- Strong Employment Data: US nonfarm payrolls rose by 115,000 in April, exceeding expectations of 65,000, while March figures were revised up to 185,000, indicating labor market resilience that supports stock market gains.
- Declining Consumer Confidence: Despite rising stock prices, the University of Michigan's May consumer sentiment index fell by 1.6 to a record low of 48.2, reflecting consumer concerns about the economic outlook, which could negatively impact future spending.
- Chip Stocks Lead Gains: Chipmakers like Micron and Qualcomm saw stock prices rise over 8%, driving the overall market higher, demonstrating the strong performance of tech stocks in the current market environment, although weakness in software stocks limited gains in the Dow.
- Oil Price Volatility Impact: WTI crude prices edged up slightly due to Iran seizing an oil tanker in the Strait of Hormuz, complicating market expectations for future oil prices, which may influence investment decisions in related sectors.
See More
