As AI Momentum Grows, Should Investors Buy ServiceNow Stock?
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Aug 02 2025
0mins
Source: NASDAQ.COM
Strong Q2 Performance: ServiceNow reported a 22.5% year-over-year revenue growth, reaching $3.22 billion, and raised its subscription revenue guidance for the full year due to strong AI adoption, despite its stock struggling this year.
AI Integration and Future Outlook: The company is well-positioned in the AI space with initiatives like Now Assist and AI Control Tower, which are expected to drive further growth, while also seeing an increase in large customer acquisitions and performance obligations.
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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: 103.290
Low
172.00
Averages
222.81
High
263.00
Current: 103.290
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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See More
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- AI Disrupts Traditional Software: The rise of Anthropic poses significant challenges to traditional software companies like Workday and Salesforce, particularly in the application of AI technology, threatening their market share and customer loyalty.
- Surge in Capital Expenditures: Tech giants like Amazon and Google have significantly raised their capital expenditure outlooks, with Amazon projecting spending to reach $200 billion, far exceeding the $147 billion consensus, which could impact stock performance and investor confidence.
- Intensified Market Competition: The rapid advancement of AI technology raises questions about the value of enterprise software, leading investors to adopt a pessimistic view on the future of traditional software companies, especially in labor-intensive areas that may face workforce reductions due to AI adoption.
- Investor Confidence Shaken: Despite significant advancements by companies like Anthropic and OpenAI in the AI space, market confidence in traditional software companies is waning, resulting in poor stock performance over the past six months and raising concerns about future profitability.
See More
AI Concerns Trigger Market Turmoil
- Market Volatility Intensifies: The S&P 500 and Nasdaq Composite both fell over 1% last week due to AI concerns, with sell-offs in Financial Services, Consumer Discretionary, and tech stocks indicating the potential impact of AI across multiple industries.
- Logistics Sector Hit: Shares of C.H. Robinson and Universal Logistics dropped 11% and 9%, respectively, after a Florida-based company announced a new tool to scale freight volumes without increasing headcount, highlighting AI's threat to traditional logistics models.
- Wealth Management Turmoil: Charles Schwab and Raymond James saw their stocks decline by 10% and 8%, respectively, as the launch of an AI-driven tax tool raised fears about pressure on high advisory fees, further fueling market concerns over automation.
- Investor Sentiment Cautious: Despite the sell-off, analysts believe the current pullback is a short-term phenomenon, forecasting the S&P 500 to reach 7,600 by year-end, reflecting optimism towards other sectors amidst the volatility.
See More
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- Increased Market Volatility: Last week, stocks in software, real estate, financial services, and logistics faced selling pressure due to concerns over AI-related disruptions, with the Nasdaq Composite falling 0.2% and a weekly loss of 2.1%, indicating market sensitivity to AI impacts.
- Consumer Spending Data Focus: This week's highlight will be the Personal Consumption Expenditures (PCE) report on Friday, which will provide insights into consumer spending in December and inflation trends, especially following last week's unexpected slowdown in the Consumer Price Index (CPI).
- Corporate Earnings in Spotlight: Walmart (WMT) is set to release its fourth-quarter earnings on Thursday, marking the first report under new CEO John Furner, making it a key indicator of consumer spending that the market is eagerly anticipating.
- Ongoing AI Impact: As AI tools' potential effects intensify across various sectors, software stocks like Salesforce (CRM) and ServiceNow (NOW) have seen significant declines, reflecting the market's heightened vigilance regarding AI disruptions, necessitating close monitoring of future industry developments.
See More
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- Ciena's Growth Potential: Ciena's leadership in networking and connectivity has led to a surge in demand as a key player in AI infrastructure, with expectations for its data center business to double sales by 2025, and its addressable market projected to grow from $600 billion to $1 trillion by 2028, indicating strong long-term growth potential.
- Sandisk's Performance Surge: Since splitting from Western Digital, Sandisk's stock has skyrocketed 1,440%, with data center revenue increasing 64% sequentially and 61% year-over-year in Q2 2026, showcasing robust demand and profitability in the NAND flash memory market.
- ServiceNow's Market Opportunity: Despite a 50% decline in stock price over the past year, ServiceNow's dominant position in workflow software and partnerships with AI companies present growth opportunities, with a current P/E ratio of 29 indicating room for expansion.
- Tech Stock Overall Rebound: As investors refocus on undervalued tech stocks, the S&P 500 has had a lukewarm start, while the Dow Jones Industrial Average reached a record high of 50,000, reflecting a recovering market confidence in technology stocks.
See More
Market Dynamics of Ciena, Sandisk, and ServiceNow
- Ciena Demand Surge: As companies build new data centers, demand for Ciena's networking components is accelerating, with expectations for its data center business to double sales by 2025, and its addressable market projected to grow from $600 billion to $1 trillion by 2028, highlighting its critical role in AI infrastructure.
- Sandisk Performance Boom: Sandisk's stock has skyrocketed 1,440% since splitting from Western Digital, with data center revenue up 64% sequentially and 61% year-over-year in Q2 2026, reflecting strong demand for NAND flash memory, particularly in AI hyperscalers.
- ServiceNow Market Opportunity: Despite a 50% drop in stock price over the past year, ServiceNow's dominant position in workflow software and partnerships with AI companies suggest it is undervalued at current prices, with significant growth potential anticipated in 2026.
- Investor Attention: While Ciena is viewed as a high-growth tech stock, it was not included in Motley Fool's current list of top investment picks, indicating that investors should exercise caution and stay informed about market trends.
See More
Three Hyper-Growth Tech Stocks to Buy in 2026
- Ciena's Market Potential: Ciena leads in networking and connectivity, with its data center business expected to double sales by 2025, growing its addressable market from $600 billion last year to $1 trillion by 2028, indicating strong growth potential and profitability.
- Sandisk's Strong Performance: Since splitting from Western Digital, Sandisk's stock has surged 1,440%, with data center revenue up 64% sequentially in Q2 2026, reflecting robust demand for NAND flash memory, and adjusted EPS reaching $6.20, significantly higher than last year's $1.23.
- ServiceNow's Investment Opportunity: Despite a 50% drop in stock price over the past year, ServiceNow's dominant position in workflow software and partnerships with AI companies suggest it is undervalued at a P/E ratio of 29, indicating substantial growth potential ahead.
- AI-Driven Technological Transformation: As AI technology evolves, companies like Ciena, Sandisk, and ServiceNow are strategically adapting to market demands, particularly with Ciena and Sandisk's rapid growth in the data center sector, signaling future investment opportunities.
See More
