Dec. 16, 2025 — ServiceNow, Inc. (NYSE: NOW) is having a very “2025 tech stock” moment: big strategic ambition, big market reaction, and Wall Street arguing in public.
Shares of the enterprise workflow software leader closed at about $765.20 after sliding roughly 11.5% in the latest session, one of the stock’s steepest single-day drops in months. [1]
The immediate catalyst isn’t earnings. It’s M&A speculation: a report that ServiceNow is in advanced talks to buy cybersecurity firm Armis in a deal that could be valued at up to $7 billion—potentially ServiceNow’s biggest acquisition to date. [2]
At the same time, investors are staring down a near-term technical milestone: today (Dec. 16) is the record date for ServiceNow’s 5-for-1 stock split, with split-adjusted trading expected later this week. [3]
Below is what’s driving NOW stock right now—plus the latest forecasts and analyst takes as of Dec. 16, 2025.
Why ServiceNow stock dropped: a deal headline and an AI-themed downgrade collided
ServiceNow’s drop wasn’t about one single fear—it was two narratives landing at once:
- A massive rumored acquisition (Armis) raises familiar questions:
- Is ServiceNow paying a peak multiple?
- Does the deal imply organic growth is slowing?
- Will integration distract management at the worst possible time for enterprise software?
- A notable downgrade added fuel. KeyBanc cut ServiceNow to Underweight and set a $775 price target, citing signals in IT back-office employment data and arguing that the “death of SaaS” (software-as-a-service) narrative could reach even high-quality platform names in 2026—especially as AI changes how enterprise software is bought and used. [4]
In other words: the market wasn’t just reacting to a deal. It was reacting to what the deal might mean about ServiceNow’s next growth chapter. [5]
What we know about the rumored Armis acquisition
According to Reuters (citing a Bloomberg report), ServiceNow is in advanced talks to acquire Armis, a cybersecurity startup that had been considering an IPO next year. Reuters notes the deal could be announced in the coming days, but also cautions that talks could still fall apart or another bidder could emerge. [6]
Reuters also adds key context on Armis:
- Armis raised $435 million in a November funding round that valued it at $6.1 billion. [7]
- The company, founded in 2016, focuses on securing connected devices in real time, and Reuters reports it serves more than 40% of the Fortune 100. [8]
Strategically, this is the crux: Armis sits at the intersection of IT + IoT + operational technology (OT)—the world of factories, infrastructure, medical devices, and “everything is a computer now” industrial reality. That’s attractive terrain for a platform company like ServiceNow, but it also tends to be expensive terrain because cyber assets with scale and enterprise penetration don’t come cheap.
The bull case for Armis: strengthening the platform “control plane”
Not everyone sees the rumored deal as a red flag. Several takes in today’s coverage highlight the logic:
- Armis could bolster ServiceNow’s presence in operational technology environments and improve data/asset visibility that feeds automation and AI-driven workflows (including configuration and asset management use cases). [9]
- Cybersecurity M&A has been active across the sector, which suggests strategic buyers are racing to assemble broader platforms. [10]
The core bullish argument is simple: if enterprises want fewer dashboards and more unified control, platform winners expand into adjacent control surfaces—security being one of the most defensible ones.
The bear case: price, dilution, distraction—and a “growth math” tell
The market’s pushback is also understandable. A ~$7B price tag is large enough that investors start doing “growth math” in real time:
- If this becomes ServiceNow’s largest deal, shareholders will ask whether management is leaning more on inorganic growth to sustain premium growth expectations. [11]
- Deal size raises the stakes on integration, and skeptics worry it could dilute focus on generative/agentic AI efforts. [12]
That’s why the stock reaction was so violent: it wasn’t just “M&A risk.” It was “M&A risk + narrative risk.”
Analyst reactions on Dec. 16: upgrades, reiterations, and warnings
Guggenheim upgrades… but doesn’t turn bullish
In a widely circulated note today, Guggenheim upgraded ServiceNow from Sell to Neutral after the stock fell below the firm’s price target. Guggenheim explicitly warned the change is not a buy call and said there could be further downside. [13]
That’s a classic “valuation reset” upgrade: the firm is less negative because price dropped, not because the story suddenly got better.
RBC stays optimistic and keeps a $1,200 target
RBC Capital reiterated Outperform with a $1,200 price target, framing software consolidation as likely in an “AI-first” world and viewing ServiceNow as a potential consolidator. [14]
RBC’s note also describes Armis as an “agentless” device security platform spanning IT/IoT/OT and cloud environments—exactly the kind of coverage that fits modern enterprise risk management. [15]
KeyBanc’s downgrade sharpened the AI disruption debate
KeyBanc’s cut to Underweight (and “death of SaaS” framing) is a reminder that the 2026 debate in enterprise software may not be “who has AI features?” but “who captures AI value without getting commoditized?” [16]
The other big ServiceNow headline: Moveworks deal closes
While Armis is still only a report, ServiceNow’s prior blockbuster is now official: ServiceNow completed its acquisition of Moveworks on Dec. 15, positioning it as an “AI-native front door” for employee engagement and workflow execution. [17]
In the deal announcement, the company said combining ServiceNow’s workflow automation with Moveworks’ AI assistant and enterprise search is intended to scale AI adoption across the enterprise. The press release also included some punchy internal metrics—ServiceNow stated that AI agents resolve 90% of IT and 89% of customer support requests autonomously inside the company, and that Moveworks brings 5.5 million employee users and about 250 mutual customers already using both technologies. [18]
For investors, this matters because it reframes the strategic sequence:
- ServiceNow closes a major agentic AI acquisition (Moveworks),
- then is reported to be exploring a major cybersecurity/OT acquisition (Armis).
That looks less like random shopping and more like a deliberate attempt to widen the platform’s footprint—though the market is clearly debating whether the price is right.
Stock split: Dec. 16 record date, split-adjusted trading expected Dec. 18
ServiceNow’s 5-for-1 stock split is now on the clock:
- The SEC filing states shareholders of record at the close of market on Dec. 16, 2025 will receive four additional shares per share held, reflected around Dec. 17, with split-adjusted trading expected around Dec. 18. [19]
- The Options Clearing Corporation (OCC) memo also notes an ex-distribution date of Dec. 18 and explains how options contracts are adjusted (including strike divisor and multiplier changes). [20]
A split doesn’t change the company’s intrinsic value by itself—but it can change trading dynamics. After the split, NOW’s per-share price will be roughly one-fifth of the pre-split level (all else equal), which can make the stock more accessible and may increase retail participation.
Security strategy beyond Armis: Veza acquisition plan
ServiceNow is also already in motion on security via another announced transaction: on Dec. 2, the company said it intends to acquire Veza, an identity security firm, to expand its Security and Risk portfolio—particularly to manage access and permissions across people, machines, and AI agents. [21]
Veza’s “Access Graph” approach is designed to map access relationships across identity types—exactly the kind of governance layer enterprises worry about as AI agents gain real permissions in production systems. [22]
This matters for NOW stock because it supports a coherent thesis: ServiceNow is trying to become not just a workflow engine, but a governance and control layer for automated work.
Forecasts for ServiceNow stock: price targets still point higher, but dispersion is huge
Despite the selloff, consensus on the Street remains broadly positive—though increasingly divided.
StockAnalysis’ compilation (31 analysts) shows:
- Consensus rating: Buy
- Average 12-month price target:$1,111
- Median target:$1,150
- Low / high target range:$724 to $1,300 [23]
The same compilation also lists KeyBanc’s downgrade among the latest actions (target $775). [24]
On the fundamentals forecast side, the same dataset indicates analysts are modeling:
- Revenue rising to about $13.36B (FY2025) and $15.81B (FY2026), implying growth moderating from ~22% to ~18% next year. [25]
Separately, Trefis’ Dec. 16 analysis emphasizes a similar tension: strong operational performance metrics paired with very high valuation, making the stock “attractive but volatile.” [26]
What to watch next for NOW stock
Heading into the split and into year-end, the next price-driving events are likely to be:
1) Confirmation or denial on Armis
If ServiceNow confirms the deal, investors will immediately shift to:
- price/financing structure,
- integration timeline,
- and whether management frames it as additive to growth without lowering organic expectations. [27]
2) Updated analyst target changes
Today already brought a “downside-to-neutral” upgrade (Guggenheim) and a high-upside reiteration (RBC). More notes often follow after a move this large. [28]
3) Post-split trading dynamics
Splits can change liquidity patterns, options positioning, and retail activity—especially when a stock is already volatile. [29]
4) The bigger 2026 debate: can premium SaaS keep premium multiples in the AI era?
KeyBanc’s “death of SaaS” framing is extreme language, but it points at a real investor question: which platforms capture durable value as AI lowers friction and shifts where software budgets flow? [30]
Bottom line
ServiceNow stock’s sharp drop has turned an already busy month into a full-on narrative crossroads:
- Moveworks is officially in the building, strengthening ServiceNow’s agentic AI ambitions. [31]
- Armis is the big “maybe,” and at ~$7B it’s big enough to change how investors think about ServiceNow’s growth mix and strategic direction. [32]
- The stock split is imminent, and today’s record date makes Dec. 16 a key timestamp for shareholders watching position sizing, options, and tax lots. [33]
Wall Street still forecasts meaningful upside based on consensus targets, but the dispersion is wide—reflecting a market that’s no longer debating whether ServiceNow is a great company, but whether it can remain a great stock at a time when AI is rewriting the rules of enterprise software.
References
1. stockanalysis.com, 2. www.reuters.com, 3. www.sec.gov, 4. www.tipranks.com, 5. www.marketwatch.com, 6. www.reuters.com, 7. www.reuters.com, 8. www.reuters.com, 9. www.barrons.com, 10. www.investopedia.com, 11. www.marketwatch.com, 12. www.marketwatch.com, 13. www.investing.com, 14. www.investing.com, 15. www.investing.com, 16. www.tipranks.com, 17. newsroom.servicenow.com, 18. www.businesswire.com, 19. www.sec.gov, 20. infomemo.theocc.com, 21. veza.com, 22. veza.com, 23. stockanalysis.com, 24. stockanalysis.com, 25. stockanalysis.com, 26. www.trefis.com, 27. www.reuters.com, 28. www.investing.com, 29. www.sec.gov, 30. www.tipranks.com, 31. newsroom.servicenow.com, 32. www.reuters.com, 33. www.sec.gov
