In a notable display of conviction, ServiceNow’s top leadership has taken coordinated actions that signal strong belief in the company’s future. CEO Bill McDermott has committed to a substantial open-market purchase, while several other senior executives have suspended their pre-arranged stock sale plans. These moves come during a period of significant pressure across the software sector.
CEO Plans Multi-Million Dollar Equity Purchase
According to filings with the SEC, Bill McDermott is scheduled to acquire $3 million worth of ServiceNow shares on February 27. This date represents the earliest possible opportunity for the transaction to proceed without contravening the short-swing profit rules of the Securities Exchange Act. The planned investment arrives as the company’s share price has declined approximately 30% since the start of the year.
Senior Management Suspends Automatic Selling Plans
In a mandatory disclosure on February 17, ServiceNow revealed that five of its high-ranking officers—including the Chief Financial Officer and the Chief People Officer—have terminated their Rule 10b5-1 trading plans. These automated plans typically allow corporate insiders to sell shares according to a predetermined schedule without violating insider trading regulations.
The termination is significant because it forces these executives to observe mandatory waiting periods before they can establish any new selling programs. Market observers, including Bloomberg, have interpreted this collective pause as a deliberate effort to bolster investor confidence during a challenging market phase.
Board Authorizes Aggressive Capital Return Program
Further underscoring management’s stance, the company’s board approved an additional share repurchase authorization of $5 billion in late January. This new program supplements a remaining balance of $1.4 billion from prior authorizations. Of the total, $2 billion is allocated to an accelerated buyback initiative, which will immediately reduce the share count.
Analysts at MarketBeat view this aggressive capital return policy as a clear indication that the leadership team considers the current stock price to be substantially undervalued.
Should investors sell immediately? Or is it worth buying ServiceNow?
Sector-Wide Challenges and Selective Opportunity
The broader software industry has faced headwinds, with the sector down about 22% in 2026. Concerns are centered on the potential for artificial intelligence to disrupt traditional software business models. A thesis known as “Seat Compression” suggests that AI agents could reduce the number of software licenses required per employee.
ServiceNow, along with peers like Salesforce, Adobe, and CrowdStrike, has been affected by this sentiment. However, research from UBS, cited by CNBC, has identified ServiceNow as one of four software equities with selective potential, noting that many stocks now trade below their historical valuation levels.
Operational Performance Remains Robust
Despite the share price weakness, ServiceNow’s underlying business continues to demonstrate strength. For the fourth quarter of 2025, subscription revenue grew 21% year-over-year to $3.47 billion. The company’s free-cash-flow margin reached an impressive 57%.
ServiceNow is strategically positioning itself as an “AI Control Tower” for enterprise operations. The company’s thesis is that as businesses deploy more autonomous AI agents, their need for corresponding governance and security infrastructure will increase—a role ServiceNow aims to fulfill.
The stock closed at $107.81 on February 18, trading below both its 50-day moving average of $135.57 and its 200-day average of $163.26. Market participants will be watching to see if McDermott’s follow-through purchase on February 27 attracts additional buying interest from investors.
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