ServiceNow keeps delivering the sort of numbers that should send a stock flying. Revenue jumped 22% in the first quarter to $3.77 billion. The management team raised its full-year guidance and talks openly about hitting $30 billion in annual sales by 2030. Yet the stock has been roughed up mercilessly. Over the past month it shed 6.56%, sliding to €80.36, before a further 1.57% dip carried it to €81.50 in the most recent session. From its all-time peak, the shares have now cratered more than 60%.
The source of the pain traces back to February 2026, when Anthropic unveiled an autonomous AI platform capable of running operating systems and orchestrating complex business processes without human intervention. Within 48 hours, the market vaporised roughly $285 billion in valuation across the software sector. Traders quickly dubbed the event the “SaaSpocalypse,” and the fear has lingered ever since: if artificial intelligence can do the work, why would companies keep paying for expensive software licenses? Rivals such as Salesforce are also feeling the pressure, and the entire sector is undergoing a brutal repricing.
ServiceNow’s response has been to roll out its own army of AI agents. In June 2026 the company switched on new digital specialists that work alongside human employees, resolving IT tickets and handling employee requests at scale. Internal tests show the system can now solve nine out of ten support cases without any human intervention. That efficiency is backed by staggering numbers: 23 million employees use the ServiceNow portal each month, generating over 40 million service requests annually. The technology clearly works, and the company plans to release even more AI tools in September.
But efficiency comes at a cost. The subscription gross margin has slipped from 84.5% to 81.5%, driven by heavy infrastructure spending on AI and the integration of acquisitions such as Armis. Net income in the first quarter was essentially flat at $469 million, compressing the profit margin significantly. Stock-based compensation adds to the drag. And with interest rates remaining elevated, software stocks that rely on far-off future earnings are especially vulnerable; higher discount rates automatically pressure valuations.
Should investors sell immediately? Or is it worth buying ServiceNow?
Wall Street is not giving up. The vast majority of analysts rate the shares a buy, and not one recommends selling. The average price target sits at roughly $141 (€125.05), implying upside of more than 50% from current levels. Benchmark recently lifted its target to $130. The annualised volatility of nearly 78% underscores the extreme nervousness among investors.
The next major test comes on July 21, 2026, when ServiceNow reports second-quarter results. The market expects revenue of nearly $4 billion. Those numbers will need to show that the new AI agents are not just boosting efficiency but also converting into tangible contract wins. In the meantime, ServiceNow is betting that its “control tower” strategy — positioning itself as the neutral orchestrator for multiple AI models — will win out over the closed ecosystems of competitors like Salesforce’s Agentforce. If every vendor builds its own data silos, the central-control-tower idea collapses.
For now, the company is caught in a tug-of-war between strong fundamentals and a macro environment that punishes long-duration growth stocks. The stock is a highly volatile battlefield, and nothing short of lower interest rates or a convincing proof that AI orchestration works at scale will likely break the deadlock.
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