Key Stats for ServiceNow Stock
- Price change for ServiceNow stock: -8%
- $NOW Stock Price as of Apr. 10: $83
- 52-Week High: $211
- $NOW Stock Price Target: $182
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What Happened?
ServiceNow (NOW) stock fell 8% on Friday after UBS downgraded the company from Buy to Neutral, cutting its price target from $170 to $100.
- The drop adds to a brutal stretch for the stock, which has now lost 44% of its value year to date.
- UBS analysts Karl Keirstead and Claire Gerder said their confidence in ServiceNow’s AI edge has weakened.
- Until now, the firm had rated ServiceNow as its only Buy in application software, believing it was better positioned for the AI era than its peers. That view has shifted.
The core concern is budget pressure.
- UBS says it started hearing from large enterprise customers in December that AI spending was taking priority — and that non-AI software budgets were getting squeezed as a result.
- The analysts estimate that more than half of their enterprise customer calls now include some mention of pulling back on core software spend.
There’s also a product-specific worry.
- UBS said it didn’t hear consistent buy-in from customers about using ServiceNow as their go-to layer for AI agent orchestration — one of the company’s key growth pitches.
- That’s a meaningful signal given how central agentic AI is to ServiceNow’s long-term story.
On the numbers side, UBS lowered its estimate of current remaining performance obligations growth to 16% from 20% as of the end of 2026.
It also flagged that revenue beats over the next few quarters are likely to be smaller than usual.
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What the Market Is Telling Us About ServiceNow Stock
ServiceNow stock had already been under pressure before Friday’s downgrade.
A 44% year-to-date drop reflects growing anxiety about whether enterprise software companies can hold their ground as AI reshapes how businesses spend on technology.
That said, UBS acknowledged there are positives.
- Several customers described ServiceNow’s leadership as proactive and engaged on AI. And
- The Q4 2025 earnings call told a strong story — 21% subscription revenue growth, Now Assist surpassing $600 million in ACV, and a guidance of 20% growth in 2026.
The tension is real.
- ServiceNow stock is getting caught between solid fundamentals and rising doubt about whether the company’s AI positioning is as strong as the market once believed.
- With the stock now trading at just 15 times 2026 free cash flow, the valuation has come down sharply.
Whether that makes ServiceNow stock a buying opportunity or a value trap depends on how the AI budget picture develops in the months ahead.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
