ServiceNow's Strategy Against AI Threats
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 21 hours ago
0mins
Should l Buy NOW?
Source: Fool
- Stock Decline: ServiceNow's stock has plunged approximately 35% year-to-date, yet the company's robust business performance indicates potential for long-term investment despite the AI threat.
- AI Integration: By partnering with Anthropic and OpenAI, and acquiring Moveworks, ServiceNow has successfully integrated AI into its platform, with its Autonomous Workforce product capable of automating 90% of IT support functions, enhancing client efficiency.
- Sales Growth: In 2025, ServiceNow's sales rose 21% year-over-year to $13.3 billion, with subscription revenue accounting for $12.9 billion, and the company expects to maintain a 21% growth rate in 2026, showcasing a stable revenue stream.
- Future Outlook: Despite a significant drop from its 52-week high of $211.48, the company ended 2025 with $28.2 billion in remaining performance obligations, indicating strong future revenue potential, making it an opportune time for investors to seek outsized returns.
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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: 89.810
Low
172.00
Averages
222.81
High
263.00
Current: 89.810
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 Expected to Report Q1 Earnings on April 22
- Earnings Expectations: ServiceNow is set to report Q1 earnings on April 22, with analysts forecasting quarterly revenue of $3.75 billion, reflecting a 21% year-on-year increase, indicating ongoing growth amidst market pressures.
- Full-Year Revenue Guidance: The company estimates full-year subscription revenues between $15.53 billion and $15.57 billion, although BTIG analysts suggest this growth guidance may be overly aggressive, potentially limiting upside for the stock, reflecting cautious market sentiment regarding future performance.
- AI Strategic Shift: ServiceNow announced that its entire product portfolio will be AI-enabled, introducing the Context Engine and Build Agent tools aimed at enhancing workflow autonomy and enterprise-wide AI effectiveness, which could strengthen the company's competitive position in the long run.
- Market Sentiment Fluctuations: Despite NOW stock declining over 39% this year, retail sentiment on Stocktwits remains extremely bullish, indicating investor confidence in the company's fundamentals, even as it faces selling pressure.
See More
ServiceNow Unveils Comprehensive AI Product Portfolio
- Comprehensive AI Integration: ServiceNow announces that its entire product portfolio is now AI-enabled, allowing organizations to accelerate AI adoption through built-in AI, data connectivity, and workflow execution, thereby enhancing operational efficiency and maximizing AI value.
- Context Engine Launch: The newly introduced Context Engine provides enterprise context for every AI decision, enabling AI agents to make precise decisions and govern outcomes effectively, thus enhancing the intelligence of corporate decision-making.
- Developer-Friendly Platform: ServiceNow's SDK and Build Agent skills will be available on April 15, allowing developers to build and deploy applications directly using existing tools, significantly reducing development time and improving efficiency.
- Enterprise Service Management Foundation: ServiceNow's new Enterprise Service Management (ESM) Foundation offers a rapid deployment solution for mid-sized companies, enabling AI-driven service management to be operational in weeks, thus providing quick ROI.
See More
US Stocks Fluctuate Slightly as Inflation Concerns Ease
- Market Performance: The S&P 500 Index rose by 0.07%, reaching a five-week high, while the Nasdaq 100 Index increased by 0.37%, marking a six-week high, reflecting market optimism due to easing inflation concerns.
- Inflation Data Impact: The US March Consumer Price Index rose 3.3% year-over-year, the largest increase in two years but slightly below the expected 3.4%, leading to a reduced market expectation of a 2% chance for a Fed rate hike.
- Oil Price Volatility: WTI crude oil prices are fluctuating due to the near closure of shipping through the Strait of Hormuz, with over 800 vessels trapped, raising concerns about global energy supply amid heightened focus on the Iranian situation.
- Tech Stock Pressure: Software stocks are under pressure due to AI disruption fears, with ServiceNow and Datadog down over 6% and 5% respectively, indicating market uncertainty regarding the future of the tech sector.
See More
UBS Downgrades ServiceNow to Neutral Amid Revenue Concerns
- Rating Downgrade: UBS has downgraded ServiceNow from Buy to Neutral, anticipating revenue growth to be below normal for the next few quarters, resulting in a 6% drop in the stock during Friday morning trading.
- Stock Performance: ServiceNow shares have lost 45% of their value year-to-date, reflecting market concerns about its future performance, with UBS analysts noting that while the company is better positioned in the AI era, their confidence has weakened.
- Earnings Forecast Adjustment: UBS slashed its price target on ServiceNow from $170 to $100 and lowered its remaining performance obligations estimate for the end of 2026 from 20% to 16%, indicating a cautious outlook on the company's future revenue.
- Customer Feedback: Despite the pressure, some customers noted that ServiceNow is 'actively engaging AI,' suggesting proactive leadership in adapting to market changes, although concerns about non-AI software spending are increasing.
See More
TSMC Reports 35% Revenue Growth in Q1
- TSMC's Strong Performance: TSMC reported a 35% year-over-year revenue increase in Q1, with March alone seeing a 45% surge, indicating robust demand in the semiconductor market that could help Nvidia's stock break free and join the ranks of memory stocks.
- Intel Price Target Raised: Melius Research raised Intel's price target from $58 to $75 while maintaining a buy rating, reflecting optimism about its partnerships with Elon Musk's Terafab project and Google, with CEO Lip-Bu Tan's leadership being widely acknowledged.
- UBS Downgrades ServiceNow: UBS downgraded ServiceNow from buy to hold, citing weakened confidence in its ability to withstand AI disruption, despite the stock already being down 41% year-to-date, indicating a significant shift in analyst sentiment.
- Southern Company Price Target Increased: Citi raised Southern Company's price target from $107 to $114, as analysts see growth potential amid the surge in demand for electricity driven by AI data centers, maintaining a buy rating and reflecting optimism in the utility sector.
See More
Wall Street's Latest Rating Changes Analysis
- MSG Sports Upgrade: Seaport upgraded Madison Square Garden Sports from neutral to buy, citing a significant 57.5% trading discount versus intrinsic value, suggesting a potential appreciation ahead of the 2025-26 season, particularly with plans to spin off the Knicks and Rangers into standalone entities.
- ServiceNow Downgrade: UBS downgraded ServiceNow from buy to neutral due to weakened confidence in the software sector, projecting a decline in 2026 free cash flow to 15x, reflecting increased budget pressures on non-AI applications that could impact future performance.
- Shake Shack Sales Growth: Mizuho upgraded Shake Shack from neutral to outperform, anticipating upside in same-store sales for Q1, driven by strong demand and improved restaurant-level margins, indicating robust market momentum and growth potential.
- Nvidia Strong Performance: Raymond James reiterated a strong buy rating on Nvidia, based on favorable trends in its Asia supply chain, with suppliers receiving increased forecasts during the quarter, reinforcing Nvidia's position as a market leader.
See More
ServiceNow Expected to Report Q1 Earnings on April 22
- Earnings Expectations: ServiceNow is set to report Q1 earnings on April 22, with analysts forecasting quarterly revenue of $3.75 billion, reflecting a 21% year-on-year increase, indicating ongoing growth amidst market pressures.
- Full-Year Revenue Guidance: The company estimates full-year subscription revenues between $15.53 billion and $15.57 billion, although BTIG analysts suggest this growth guidance may be overly aggressive, potentially limiting upside for the stock, reflecting cautious market sentiment regarding future performance.
- AI Strategic Shift: ServiceNow announced that its entire product portfolio will be AI-enabled, introducing the Context Engine and Build Agent tools aimed at enhancing workflow autonomy and enterprise-wide AI effectiveness, which could strengthen the company's competitive position in the long run.
- Market Sentiment Fluctuations: Despite NOW stock declining over 39% this year, retail sentiment on Stocktwits remains extremely bullish, indicating investor confidence in the company's fundamentals, even as it faces selling pressure.
See More
ServiceNow Unveils Comprehensive AI Product Portfolio
- Comprehensive AI Integration: ServiceNow announces that its entire product portfolio is now AI-enabled, allowing organizations to accelerate AI adoption through built-in AI, data connectivity, and workflow execution, thereby enhancing operational efficiency and maximizing AI value.
- Context Engine Launch: The newly introduced Context Engine provides enterprise context for every AI decision, enabling AI agents to make precise decisions and govern outcomes effectively, thus enhancing the intelligence of corporate decision-making.
- Developer-Friendly Platform: ServiceNow's SDK and Build Agent skills will be available on April 15, allowing developers to build and deploy applications directly using existing tools, significantly reducing development time and improving efficiency.
- Enterprise Service Management Foundation: ServiceNow's new Enterprise Service Management (ESM) Foundation offers a rapid deployment solution for mid-sized companies, enabling AI-driven service management to be operational in weeks, thus providing quick ROI.
See More
US Stocks Fluctuate Slightly as Inflation Concerns Ease
- Market Performance: The S&P 500 Index rose by 0.07%, reaching a five-week high, while the Nasdaq 100 Index increased by 0.37%, marking a six-week high, reflecting market optimism due to easing inflation concerns.
- Inflation Data Impact: The US March Consumer Price Index rose 3.3% year-over-year, the largest increase in two years but slightly below the expected 3.4%, leading to a reduced market expectation of a 2% chance for a Fed rate hike.
- Oil Price Volatility: WTI crude oil prices are fluctuating due to the near closure of shipping through the Strait of Hormuz, with over 800 vessels trapped, raising concerns about global energy supply amid heightened focus on the Iranian situation.
- Tech Stock Pressure: Software stocks are under pressure due to AI disruption fears, with ServiceNow and Datadog down over 6% and 5% respectively, indicating market uncertainty regarding the future of the tech sector.
See More
UBS Downgrades ServiceNow to Neutral Amid Revenue Concerns
- Rating Downgrade: UBS has downgraded ServiceNow from Buy to Neutral, anticipating revenue growth to be below normal for the next few quarters, resulting in a 6% drop in the stock during Friday morning trading.
- Stock Performance: ServiceNow shares have lost 45% of their value year-to-date, reflecting market concerns about its future performance, with UBS analysts noting that while the company is better positioned in the AI era, their confidence has weakened.
- Earnings Forecast Adjustment: UBS slashed its price target on ServiceNow from $170 to $100 and lowered its remaining performance obligations estimate for the end of 2026 from 20% to 16%, indicating a cautious outlook on the company's future revenue.
- Customer Feedback: Despite the pressure, some customers noted that ServiceNow is 'actively engaging AI,' suggesting proactive leadership in adapting to market changes, although concerns about non-AI software spending are increasing.
See More
TSMC Reports 35% Revenue Growth in Q1
- TSMC's Strong Performance: TSMC reported a 35% year-over-year revenue increase in Q1, with March alone seeing a 45% surge, indicating robust demand in the semiconductor market that could help Nvidia's stock break free and join the ranks of memory stocks.
- Intel Price Target Raised: Melius Research raised Intel's price target from $58 to $75 while maintaining a buy rating, reflecting optimism about its partnerships with Elon Musk's Terafab project and Google, with CEO Lip-Bu Tan's leadership being widely acknowledged.
- UBS Downgrades ServiceNow: UBS downgraded ServiceNow from buy to hold, citing weakened confidence in its ability to withstand AI disruption, despite the stock already being down 41% year-to-date, indicating a significant shift in analyst sentiment.
- Southern Company Price Target Increased: Citi raised Southern Company's price target from $107 to $114, as analysts see growth potential amid the surge in demand for electricity driven by AI data centers, maintaining a buy rating and reflecting optimism in the utility sector.
See More
Wall Street's Latest Rating Changes Analysis
- MSG Sports Upgrade: Seaport upgraded Madison Square Garden Sports from neutral to buy, citing a significant 57.5% trading discount versus intrinsic value, suggesting a potential appreciation ahead of the 2025-26 season, particularly with plans to spin off the Knicks and Rangers into standalone entities.
- ServiceNow Downgrade: UBS downgraded ServiceNow from buy to neutral due to weakened confidence in the software sector, projecting a decline in 2026 free cash flow to 15x, reflecting increased budget pressures on non-AI applications that could impact future performance.
- Shake Shack Sales Growth: Mizuho upgraded Shake Shack from neutral to outperform, anticipating upside in same-store sales for Q1, driven by strong demand and improved restaurant-level margins, indicating robust market momentum and growth potential.
- Nvidia Strong Performance: Raymond James reiterated a strong buy rating on Nvidia, based on favorable trends in its Asia supply chain, with suppliers receiving increased forecasts during the quarter, reinforcing Nvidia's position as a market leader.
See More
