SaaS Sector Faces AI Disruption Fears
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 22 2026
0mins
Source: NASDAQ.COM
- Market Panic Intensifies: Fears that artificial intelligence will completely disrupt the software-as-a-service (SaaS) industry have led to widespread selling of SaaS stocks this year, significantly impacting investor confidence and causing substantial declines in many companies' stock prices.
- Revenue Model Shift: As AI becomes more prevalent, SaaS companies may need to transition from user-based subscription models to consumption-based models to address revenue pressures from reduced user counts, which could affect their long-term profitability.
- ServiceNow's Growth Potential: ServiceNow's Now Assist generative AI solutions have seen annual contract value rise to $600 million, projected to reach $1 billion by year-end, driving overall revenue growth of over 20%, showcasing its strong growth potential in the AI space.
- Acquisitions Enhance Competitiveness: ServiceNow's recent acquisitions of AI cybersecurity firms Armis and Veza aim to bolster its management capabilities around rights and asset visibility in an agentic AI world, providing crucial support for the company's future growth strategies.
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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: 114.190
Low
172.00
Averages
222.81
High
263.00
Current: 114.190
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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- International Trade Data Improvement: China's May exports increased by 19.4% year-on-year, surpassing expectations, showcasing potential for global economic growth, which may positively influence the US market, despite ongoing uncertainties.
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See More
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- Investor Confidence Recovery: Despite a sell-off in software stocks in February triggered by Anthropic's advanced AI tools, Bravo believes investors are underestimating software companies' adaptability, particularly as his portfolio companies thrive with a combined revenue of $35 billion driven by AI.
- Market Adjustment Phase: Bravo highlighted that the market is currently in an adjustment phase where investors and companies must address governance, cybersecurity, and ROI concerns regarding new AI tools, indicating a cautious approach amid rapid industry changes.
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- ServiceNow's Transformation: By embracing AI technology, ServiceNow anticipates doubling its subscription revenue to $30 billion by 2030, despite a more than 50% drop in stock price over the past 18 months; 90% of analysts still rate it a buy, reflecting confidence in its future growth.
- CrowdStrike's Security Innovation: CrowdStrike plans to launch Charlotte AI Agentic Workflows in 2025 to swiftly respond to AI-driven security threats, and despite its stock trading at nearly 34 times sales, 78% of analysts remain bullish, indicating market recognition of its technology.
- Rapid Evolution of AI Market: As AI models become increasingly commoditized, enterprises face challenges in deploying AI agents; however, companies that successfully navigate this trend are poised to drive business growth and enhance competitive positioning.
See More
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- ServiceNow's Transformation: ServiceNow is embracing AI technology, anticipating subscription revenue to double to $30 billion by 2030, with 90% of analysts rating the stock as a buy, and the high target price indicates a potential 107% upside, showcasing its strong potential in the AI sector.
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