In late January 2026, ServiceNow reported fourth-quarter and full-year 2025 results showing higher revenue and earnings, raised its 2026 subscription revenue outlook, expanded its equity buyback authorization to US$9.50 billion, and announced deeper AI collaborations and large enterprise wins with partners including Anthropic, Panasonic Avionics, and Fiserv. An important twist is that ServiceNow highlighted rapid AI adoption across its platform, such as Now Assist and Claude-powered Build Agent, even as broader markets grew more anxious about AI potentially undercutting traditional software business models. Next, we’ll examine how this mix of strong AI-fueled platform momentum and rising disruption fears could reshape ServiceNow’s investment narrative.
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What Is ServiceNow’s Investment Narrative?
To own ServiceNow today, you have to believe its AI-centric workflow platform will stay mission critical for large enterprises, even as investors question whether new AI agents might erode traditional software models. The latest quarter reinforced that core idea: revenue and earnings moved higher, management lifted its 2026 subscription revenue outlook, and the company leaned in with a larger US$9.50 billion buyback while many peers are on the defensive. At the same time, the stock has sold off hard as markets fixate on the risk that tools like Anthropic’s Claude and OpenAI’s agents could compress software pricing or displace packaged workflows. ServiceNow’s response is to embed those same models deep into Now Assist and Build Agent, and to showcase real customer wins at Panasonic Avionics and Fiserv, effectively turning a perceived threat into a near term catalyst. Whether that thesis holds will likely determine how the current disconnect between strong reported results and weak share performance resolves.
However, investors should not ignore how quickly AI pricing power could shift against software vendors.
Despite retreating, ServiceNow’s shares might still be trading 40% above their fair value. Discover the potential downside here.Exploring Other Perspectives
NOW 1-Year Stock Price Chart Fourteen fair value estimates from the Simply Wall St Community span roughly US$169,000 to a very large US$904,000, underlining just how far apart individual views can be. Set that against the recent AI driven selloff and questions over whether agentic tools might pressure ServiceNow’s high earnings multiple, and it becomes clear you are weighing very different stories about the company’s future role in enterprise software.
Explore 14 other fair value estimates on ServiceNow – why the stock might be worth over 8x more than the current price!
Build Your Own ServiceNow Narrative
Disagree with this assessment? Create your own narrative in under 3 minutes – extraordinary investment returns rarely come from following the herd.
A great starting point for your ServiceNow research is our analysis highlighting 3 key rewards that could impact your investment decision.Our free ServiceNow research report provides a comprehensive fundamental analysis summarized in a single visual – the Snowflake – making it easy to evaluate ServiceNow’s overall financial health at a glance.Curious About Other Options?
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This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.
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