ServiceNow Shares Surge on AI Optimism Following Nvidia CEO's Remarks
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 12 hours ago
0mins
Source: Yahoo Finance
- Stock Surge: ServiceNow (NOW) shares rose 10% in premarket trading, extending a strong rally that has seen the stock increase over 20% in the past week, reflecting optimistic market sentiment about its growth prospects.
- Increased AI Demand: Nvidia CEO Jensen Huang stated at Computex 2026 in Taipei that AI will not replace software companies but will instead drive demand for software by helping businesses automate tasks and improve productivity.
- Industry Impact: This message resonated with investors, particularly as they had been concerned that advancements in AI could render parts of the software industry less relevant, suggesting that companies like ServiceNow may benefit from AI integration.
- Market Reaction: The optimism spread across the software sector, with Salesforce gaining over 5% in premarket trading and IBM climbing nearly 10%, indicating a renewed investor interest in companies viewed as potential beneficiaries of enterprise AI adoption.
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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: 135.860
Low
172.00
Averages
222.81
High
263.00
Current: 135.860
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.
- Customer Spending Surge: ServiceNow's Now Assist AI product saw a 130% year-over-year increase in customers spending over $1 million in Q1, indicating strong demand for its automation platform and reinforcing its market position.
- Contract Value Growth: The company closed 16 deals worth over $5 million in new annual contract value, demonstrating long-term commitment from enterprises and potentially signaling a buying opportunity for investors.
- Revenue and Backlog Increase: Subscription revenue grew by 22% year-over-year, while backlog increased by 25% to nearly $28 billion, reflecting customer trust and ongoing investment in ServiceNow, suggesting a stable revenue stream ahead.
- Attractive Market Valuation: Despite a nearly 42% drop in stock price, ServiceNow's forward price-to-earnings ratio has fallen to around 30 times, significantly lower than historical levels, providing investors with an opportunity to enter this rapidly growing subscription business at a more attractive price.
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- Strong Market Demand: ServiceNow's subscription revenue grew 22% year-over-year, indicating sustained enterprise demand for its services, and despite the stock decline, customers are committing long-term, showcasing the company's solid market position.
- Significant Contract Growth: The company closed 16 deals worth $5 million or more in new annual contract value, suggesting this momentum may present a buying opportunity for investors and reflects corporate trust in AI solutions.
- Rising AI Product Demand: The number of customers spending $1 million or more on the Now Assist AI product surged 130% year-over-year, indicating increased trust in AI deployment, positioning ServiceNow as a trusted provider for safe, scalable AI solutions.
- Increased Valuation Attractiveness: The stock's decline has pushed ServiceNow's price-to-earnings ratio down to around 30 times, significantly below historical levels, offering investors a relatively cheap entry point, especially as the company continues to grow revenue at over 20%.
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- Strong Market Performance: The S&P 500 rose by 0.13%, the Dow Jones by 0.45%, and the Nasdaq 100 by 0.48%, with all three indices reaching new all-time highs, reflecting strong investor confidence in tech stocks amid a surge in AI investments.
- Marvell Technology Soars: Marvell Technology's stock surged over 32% after Nvidia CEO Jensen Huang predicted the company would be the next to achieve a $1 trillion valuation, significantly boosting investor confidence in its future growth prospects.
- Hewlett Packard Enterprise's Strong Earnings: Hewlett Packard Enterprise's stock jumped more than 19% after reporting Q2 adjusted EPS of 79 cents, well above the consensus estimate of 54 cents, and raising its full-year adjusted EPS forecast to $3.35-$3.45, reflecting robust demand driven by AI.
- Labor Market Strength: US April JOLTS job openings unexpectedly rose by 731,000 to a 23-month high of 7.618 million, surpassing expectations of a decline to 6.866 million, indicating resilience in the labor market and further propelling stock market gains.
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- Strong Labor Market: US April JOLTS job openings unexpectedly rose by 731,000 to a 23-month high of 7.618 million, surpassing expectations of 6.866 million, indicating labor market resilience and driving stock market gains, particularly in tech stocks.
- Tech Stock Surge: Hewlett-Packard Enterprise (HPE) shares surged over 25% after reporting Q2 adjusted EPS of 79 cents, significantly above the consensus estimate of 54 cents, and raising its full-year adjusted EPS forecast to $3.35-$3.45, reflecting robust growth in AI-driven demand.
- Market Volatility Factors: Despite overall market gains, initial declines occurred due to uncertainty surrounding a US-Iran ceasefire, with oil prices slightly down as President Trump stated negotiations with Iran are progressing “at a rapid pace,” potentially affecting investor sentiment.
- Software Stocks Under Pressure: Intuit (INTU) saw its stock drop over 10% after Goldman Sachs downgraded it to sell with a price target of $276, leading to a broader decline in the software sector, highlighting a divergence in market performance among tech stocks.
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- Market Weakness: The S&P 500 index fell by 0.20%, the Dow Jones by 0.23%, and the Nasdaq 100 by 0.33%, indicating investor uncertainty regarding the US-Iran ceasefire prospects, which may dampen market confidence.
- Tech Sector Volatility: Software stocks faced declines, with Intuit dropping over 8% following a downgrade from Goldman Sachs, while Hewlett-Packard Enterprise surged over 33% due to soaring AI demand, highlighting a divergence within the tech industry.
- Inflation Expectations Shift: Hawkish comments from Cleveland Fed President raised rate hike expectations, with the 10-year T-note yield dropping to 4.422%, reflecting growing investor concerns about persistent inflation.
- Overseas Market Dynamics: European markets showed mixed results, with Eurozone May CPI rising 3.2% year-on-year, exceeding expectations and indicating signs of economic recovery, while China's stock market rebounded, reflecting the complexities of the global economy.
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- Stock Surge: ServiceNow (NOW) shares rose 10% in premarket trading, extending a strong rally that has seen the stock increase over 20% in the past week, reflecting optimistic market sentiment about its growth prospects.
- Increased AI Demand: Nvidia CEO Jensen Huang stated at Computex 2026 in Taipei that AI will not replace software companies but will instead drive demand for software by helping businesses automate tasks and improve productivity.
- Industry Impact: This message resonated with investors, particularly as they had been concerned that advancements in AI could render parts of the software industry less relevant, suggesting that companies like ServiceNow may benefit from AI integration.
- Market Reaction: The optimism spread across the software sector, with Salesforce gaining over 5% in premarket trading and IBM climbing nearly 10%, indicating a renewed investor interest in companies viewed as potential beneficiaries of enterprise AI adoption.
See More











