ServiceNow’s first-quarter results were anything but disappointing — revenue climbed 22% year on year to $3.78 billion and net profit hit $469 million. Yet the stock has been punished, shedding nearly 6% over the past month to trade at €83.90 as of Wednesday’s session. The disconnect between operational strength and market scepticism is widening, with macro headwinds and interest-rate jitters overwhelming even the most ambitious artificial-intelligence strategy.
The company is responding with what amounts to a full-blown offensive in the enterprise-AI arena. Management has sealed five major alliances in rapid succession. Hewlett Packard Enterprise will work with ServiceNow to embed autonomous IT operations by 2027. IBM plans to modernise legacy systems for AI deployment starting in late 2026. Wipro is helping shift AI projects from pilot to production scale. The Hackett Group will assess the financial value of new initiatives, while Digimarc focuses on ensuring the provenance and reliability of AI outputs. The breadth of these partnerships underscores ServiceNow’s ambition to become the central control tower for corporate AI.
Internally, the transformation is exacting a toll. The company is laying off hundreds of employees across sales, product marketing and solutions consulting — a restructuring aimed squarely at reorienting the workforce around artificial intelligence. Management argues that the company’s own platform is already generating enormous operational efficiencies, and that it must practise what it preaches to customers.
Despite these strategic moves, the share price remains under pressure. On Wednesday the stock slipped another 0.76%, and the 30-day annualised volatility has ballooned to 78.76%. Software names like ServiceNow are particularly sensitive to long-term interest rates, and with the Federal Reserve’s next moves still uncertain, investors are taking a risk-off stance. The upcoming US inflation data for May, due Thursday, will be a critical near-term test. A hot reading would likely intensify selling pressure on high-multiple growth stocks; a cooler number could spark a relief rally.
Should investors sell immediately? Or is it worth buying ServiceNow?
Analysts, however, are not backing away. Benchmark raised its price target to $130 after meeting with management, reiterating a buy rating and praising the company’s clean business model and profitable growth. Across the Street, the consensus average target from 48 analysts stands at roughly $142 — a level that implies significant upside from current levels. The relative-strength index sits at 44.6, technically neutral, but the elevated volatility signals persistent nervousness.
The long-term picture remains ambitious. ServiceNow has set a revenue target of up to $32 billion by 2030, with artificial intelligence as the main engine. Management expects AI-driven automation to save the company $300 million in annual costs and to continue expanding margins. The current gross margin of 76.6% and trailing twelve-month revenue growth of 21.7% provide a solid foundation for those goals. The balance sheet, meanwhile, is strong, with billions in liquidity offsetting debt.
Investors will get the next major catalyst on July 29, when the company is scheduled to report second-quarter numbers. Management has guided for currency-adjusted revenue growth of roughly 21%. Some market participants had initially expected the release on July 22, but the later date has now been confirmed. Until then, the tug-of-war between ServiceNow’s operational momentum and the broader macroeconomic environment looks set to continue.
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