- Price
- $142.83
- Fair value
- $165.00
- Discount
- 13.4%
- Uncertainty
- High
- LSEG rating
- 1.82
- Moat
- Narrow
- Next earnings
- 2026-10-28
- Next earnings is estimate
- No
- Company name
- ServiceNow
- Sector
- Enterprise software (AI workflow automation)
- About
- ServiceNow makes software that helps large organizations run their internal operations. Its platform automates workflows in IT, human resources, and customer service departments. Companies pay ServiceNow through yearly subscriptions, often across multiple products on the same platform. ServiceNow also sells AI agents that complete work tasks directly, on top of its workflow software.
- Thesis
- Many investors worry that AI agents will replace the human work seats that ServiceNow's software is priced around. This could shrink revenue over time. But AI agents need governance, monitoring, and workflow infrastructure to run safely inside large companies, and ServiceNow sells that infrastructure. The company's own AI products crossed one billion dollars in annual contract value in mid-2026, and the number of customers running AI agents in production grew nine times over nine months. This is evidence that AI adoption is adding revenue, not replacing it. The stock fell sharply even as subscription revenue growth stayed above 20%, which suggests the market re-rated the whole enterprise software sector on AI fear more than it judged ServiceNow's own results.
- Risks
- The market prices ServiceNow partly on a bet that AI agents help it more than they hurt it. If large customers cut the number of paid seats faster than ServiceNow can sell new AI-based products, subscription revenue growth could slow in a way that is hard to reverse quickly.
ServiceNow just closed a $2.85 billion acquisition of Moveworks. Integrating a separate AI assistant company into ServiceNow's own AI product line carries execution risk. A slow integration could blunt the AI revenue growth the market is watching closely.
ServiceNow's new AI products are priced differently from its old per-seat subscriptions, often tied to usage or outcomes. This makes future revenue less predictable than the old subscription model. A slowdown in enterprise IT budgets could hit new AI deals harder than renewals of existing seat-based contracts.
- Recent events
- 2026-07-22: ServiceNow reported Q2 2026 results. Subscription revenue was $3.877 billion, up 24.5% from last year. The company said its AI products crossed $1 billion in annual contract value during the quarter.
2025-12-15: ServiceNow completed its $2.85 billion acquisition of Moveworks, adding AI assistant and enterprise search technology to its AI product line.