SANTA CLARA, Calif.--(BUSINESS WIRE)--ServiceNow (NYSE: NOW), the AI control tower for business reinvention, and OpenAI today announced an enhanced strategic collaboration to power agentic AI experiences and accelerate enterprise AI outcomes. The agreement unlocks a deep collaboration between OpenAI technical advisors and ServiceNow engineers that will be equipped with its frontier models, which will give customers direct access to frontier capabilities, custom ServiceNow AI solutions built and aligned to t ...

Key TakeawaysU.S. pre-market futures are significantly down, with major tech stocks like Amazon (AMZN), Alphabet (GOOGL), and Meta (META) seeing declines of over 2%, indicating a broad market sell-off.Amazon CEO Andy Jassy anticipates potential future workforce reductions due to efficiency gains from generative AI and notes that tariffs are beginning to impact prices for consumers.OpenAI and ServiceNow (NOW) have forged a significant three-year partnership to integrate AI agents into business software, sign ...

Group 1 - The AI model maker and business-software provider have signed a three-year agreement [1] - This partnership highlights the increasing integration of AI agents into corporate software solutions [1]

Group 1 - ServiceNow Inc. (NYSE:NOW) is considered one of the best debt-free stocks to buy, although there is a potential near-term headwind identified by Stifel analyst Brad Reback [1] - A reduction in U.S. federal spending has been noted, with a Treasury Department contract showing a cut of approximately $15 million due to the government's Deferred Resignation Program (DRP) [2] - The DRP allows federal employees to take fully paid leave if they resign by September 30, 2025, and is beginning to impact software seat counts across federal agencies [3] Group 2 - Estimates suggest that around 200,000 non-Department of Defense employees have opted into the DRP, which may lead to further contract adjustments and create headwinds for growth in seat-based enterprise software models through 2026 [4] - Reback reaffirmed a Buy rating for ServiceNow and adjusted the price target from $230 to $200, indicating over 40% upside potential [5] - Goldman Sachs also initiated coverage of ServiceNow with a Buy rating and a price target of $205 [5] Group 3 - ServiceNow provides cloud-based platforms for digital workflows, enabling organizations to automate and optimize business processes across various areas including IT service management and customer service [6]

Group 1 - ServiceNow, Inc. (NYSE:NOW) is recognized as a strong buy growth stock by hedge funds, with multiple firms maintaining bullish ratings and price targets ranging from $200 to $250.60 [1][2][3] - Citi expects a solid upcoming quarter for ServiceNow, supported by a strong quarter-end, healthier sales pipelines, and incremental budget releases, alongside rising contributions from AI-related offerings [2][3] - The market is currently pricing ServiceNow shares at unusually low valuation levels compared to previous cycle troughs, which does not reflect the company's fundamental trajectory [3] Group 2 - ServiceNow offers an AI platform for business transformation, enhancing productivity and maximizing business outcomes through its Now Platform, which provides end-to-end workflow automation as a cloud-based solution embedded with AI and ML [4]

Company Overview - ServiceNow, Inc. (NYSE:NOW) is currently experiencing a significant decline, with the stock at a one-year low, down by $100 [1] - The company provides a cloud platform that supports digital workflows through AI, automation, low-code tools, analytics, and various IT, security, customer-service, and employee-experience products [2] Market Performance - The stock has been negatively impacted alongside other enterprise software companies like Adobe and Salesforce, indicating a broader industry struggle [1] - Despite being recognized as a leader in AI, ServiceNow's stock is still considered to have a high price-to-earnings (P/E) ratio of 42 times earnings, which is viewed as excessive [2] Investment Sentiment - There is a cautious sentiment regarding ServiceNow as an investment, with suggestions that other AI stocks may present better upside potential and lower downside risk [2] - The recent stock split and the overall performance of software companies have raised concerns about the sustainability of ServiceNow's valuation [2]

Core Viewpoint - Analyst sentiment towards ServiceNow, Inc. (NYSE:NOW) is strengthening, driven by a robust pipeline and favorable AI trends ahead of the Q4 2025 earnings release scheduled for January 28, 2026 [2][3]. Analyst Ratings and Price Targets - Citi has initiated an "upside 30-day catalyst watch" on ServiceNow, maintaining a 'Buy' rating with a price target of $250.60, supported by strong quarter-end performance and a solid pipeline extending into fiscal 2026 [2]. - Goldman Sachs has also initiated coverage with a 'Buy' rating and a price target of $205, emphasizing the expanding total addressable market for the software due to increasing AI adoption [3]. - Conversely, Stifel has reduced its price target from $230 to $200 while keeping a 'Buy' rating, citing softer system integrator checks and conservative Q1 organic current Remaining Performance Obligations (cRPO) guidance [4]. Company Overview - ServiceNow, Inc. offers a cloud-based workflow automation platform that integrates AI and machine learning, enabling enterprises to digitize, manage, and optimize processes across IT, employee, and customer operations [5].

Core Insights - ServiceNow, Inc. (NYSE:NOW) is recognized for its strong earnings growth potential over the next five years, with analysts maintaining positive ratings and significant upside potential for the stock [1][2]. Group 1: Analyst Ratings and Price Targets - Oppenheimer analyst Brian Schwartz reaffirmed a 'Buy' rating on ServiceNow, with a price target of $200, indicating a potential upside of 68% [1]. - Evercore ISI maintained an 'Outperform' rating with a price target of $225, citing stable demand and growing adoption of the Now Assist AI offering [2]. Group 2: Company Performance and Market Position - Despite a nearly 28% decline in stock price over the last three months, Evercore ISI expects strong fourth-quarter results that will demonstrate the company's solid growth at scale [2]. - ServiceNow is positioned as a provider of cloud-based solutions for digital workflows, offering a diverse range of products including customer service management and field service management applications [4]. Group 3: Future Projections and Valuation - The company's AI strategy is projected to exceed $1 billion in annual recurring revenue (ARR) by 2026, with steady demand and increasing interest noted in partner surveys [3]. - ServiceNow's current valuation stands at approximately 22.5 times enterprise value to CY27 free cash flow, presenting an appealing long-term risk/reward profile [3].

Core Insights - ServiceNow is on track to achieve $500 million in Annual Contract Value (ACV) from AI solutions by 2025, with a target of $1 billion by 2026, indicating strong growth potential [1] - The company reported a significant increase in subscription revenues, reaching $3.3 billion in Q3, a 20% year-over-year growth [4] - ServiceNow's balance sheet remains robust, with $9.7 billion in cash and investments, and a stock repurchase program in place [6] Group 1: Financial Performance - In Q3, ServiceNow closed 103 deals worth over $1 million in net new ACV, with three deals exceeding $20 million [3] - Remaining performance obligations (RPO) grew to approximately $24.3 billion, representing a 23% year-over-year increase [4] - Adjusted net income for the quarter was reported at $4.82 per share, exceeding expectations [4] Group 2: Market Position and Growth - ServiceNow's core workflows, including ITSM, ITOM, and HR, are driving broad-based demand across various industries [2] - The company anticipates subscription sales of $3.42 billion to $3.43 billion for Q4, with an operating margin of 30% [7] - Analysts predict a 25% increase in earnings for ServiceNow in 2025, followed by a 17% increase in 2026 [7] Group 3: Stock Performance and Analyst Ratings - ServiceNow's stock has a consensus "Strong Buy" rating from Wall Street, with 34 out of 43 analysts recommending a "Strong Buy" [8] - The mean target price for ServiceNow is $219.69, indicating a potential upside of 72% from current levels [8] Group 4: Strategic Initiatives - The company has approved a five-for-one stock split to enhance share accessibility for employees [6] - ServiceNow's AI solutions are positioned as a core platform for enterprise AI and workflow transformation, which is likely contributing to its strong market position [5]

Group 1 - Forward stock splits provide individual investors with the opportunity to purchase shares that may have previously been out of their price range, exemplified by a stock trading at $2,000 becoming available at $200 after a 10-for-1 split [1] - ServiceNow (NYSE: NOW) executed a 5-for-1 forward stock split in December 2025, with the stock currently trading around $138 per share, presenting a potential investment opportunity in an enterprise software provider [2] - ServiceNow's cloud-based platform aids large organizations in automating workflows across various sectors, with 8,400 global customers, including over 85% of the Fortune 500 [4] Group 2 - ServiceNow reported a 22% increase in total revenue to $3.4 billion for the third quarter, with subscription revenue rising by 21.5%, surpassing the company's guidance [5] - The company's AI-enabled platform is designed to integrate various AI tools, with projected annual contract value from AI products exceeding $500 million for 2025, moving towards a $1 billion target for 2026 [6] - Enterprise IT spending on AI products is expected to reach $1.3 trillion by 2029, indicating a growing need for ServiceNow's software to integrate AI tools into daily operations [7]