ServiceNow and UiPath's AI Potential
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Should l Buy NOW?
Source: NASDAQ.COM
- Revenue Growth Momentum: ServiceNow continues to grow rapidly in the IT service management sector, with recent earnings reports indicating strong revenue growth rates, and it is expected to further drive revenue through its Control Tower solution, solidifying its market leadership.
- Layering AI Applications: By leveraging strong adoption of its Now Assist suite, ServiceNow enhances its market penetration of AI applications, while the launch of Control Tower could become a key driver in the agentic AI orchestration space, improving client workflow efficiency.
- Market Opportunity for UiPath: UiPath's leadership in robotic process automation (RPA) has laid the groundwork for its Maestro platform, which effectively manages software bots and third-party AI agents, expected to save costs for clients and enhance operational efficiency.
- Valuation Appeal: UiPath currently trades at a forward price-to-sales ratio of 3.5 and a price-to-earnings ratio below 15, indicating significant undervaluation potential, and if the company can sustain growth, it is poised to lead in the agentic AI orchestration market.
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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: 104.230
Low
172.00
Averages
222.81
High
263.00
Current: 104.230
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.
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- Future Performance Outlook: The company projects subscription revenue of approximately $15.5 billion for 2026, with around 20% growth on a constant currency basis, indicating robust market potential even in the rapidly evolving AI landscape.
- Buyback Plan Boosts Confidence: Management announced an additional $5 billion in stock buyback authorization and repurchased about $597 million in stock during Q4, reflecting confidence in the company's future while potentially providing support for shareholders.
- AI Strategic Positioning: ServiceNow emphasized the importance of AI in business reinvention in its latest earnings report, with the CEO stating that the company is executing a long-term platform strategy where AI agents and workflows create sustained competitive advantages.
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- Public Sector Focus: Moveworks GovCloud is built on AWS GovCloud (US) to meet specific public sector requirements, ensuring secure architecture and rigorous controls to support complex, security-sensitive environments.
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- Volatile Market Reaction: Despite a 3% after-hours gain, Nvidia's stock quickly reversed course, reflecting investor concerns in the semiconductor sector, as evidenced by the 3.3% drop in the VanEck Semiconductor ETF on the same day.
- Software Stocks Rise: In stark contrast to Nvidia's performance, software stocks saw broad gains, with the iShares Expanded Tech-Software ETF rising 2.2%, potentially linked to CEO Jensen Huang's optimistic comments about the software market.
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- ServiceNow's Market Position: ServiceNow's leadership in IT service management positions it well to thrive in the AI era, as its deep integration with customer data and workflows meets the increasing demand for unified data, enhancing its competitive edge.
- AI-Driven Growth Potential: ServiceNow's Now Assist generative AI solution has reached an annual contract value of $600 million, with projections to hit $1 billion by year-end, indicating strong growth potential in the AI space and further solidifying its market position.
- Salesforce's Strategic Acquisitions: Salesforce has enhanced its data management capabilities through acquisitions like Informatica and the launch of Data 360, which integrates data from multiple sources, ensuring its dominance in the enterprise AI platform space and improving the unified view of customer data.
- Attractive Valuations: Amid the SaaS sell-off, both ServiceNow and Salesforce stocks have become attractively valued, with ServiceNow trading at a forward price-to-sales ratio of 6.5 and Salesforce at a forward price-to-earnings ratio of 13.5, providing a solid foundation for potential price rebounds.
See More
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- Market Weakness: The S&P 500 index fell by 0.74% and the Nasdaq 100 index dropped by 1.40%, indicating market concerns over Nvidia's earnings failing to alleviate worries about an overheated AI economy, which pressured chipmakers and AI infrastructure stocks.
- Nvidia Earnings Impact: Despite Nvidia reporting Q4 revenue of $62.3 billion, surpassing the consensus of $60.36 billion, its stock declined over 4% due to concerns regarding the Chinese market, reflecting investor doubts about demand durability.
- Salesforce Strong Performance: Salesforce shares rose more than 3%, leading software stocks higher after it provided a strong long-term sales outlook and announced a large share buyback, alleviating fears of AI disruption in the software sector.
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See More
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- Investor Sentiment: The current situation is drawing significant attention from investors and analysts in the software sector.
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