New York, January 15, 2026, 18:59 EST — After-hours
- ServiceNow shares fell roughly 2.6% on Thursday, deepening their recent slide
- A Stifel note pointed to a $15 million reduction in a U.S. Treasury contract as a possible drag on seat-based software in 2026
- Investors are zeroing in on the January 28 results, hunting for demand clues—particularly on “seats” and backlog.
Shares of ServiceNow, Inc. dropped roughly 2.6% to $131.17 on Thursday, continuing a sector-wide retreat seen this week. The stock swung between $129.93 and $136.14, with volume around 14.6 million shares.
The selloff hits as investors reassess software stocks amid renewed concerns about “agentic” AI — systems designed to act on a user’s behalf rather than just respond to queries. Anthropic’s debut of “Cowork” has sparked fresh fears, with traders fretting that this kind of automation might gradually reduce the count of paid “seats,” or per-user licenses. (Investors)
Another concern is emerging in the federal market, where large contracts can tip growth one way or the other. Stifel analyst Brad Reback flagged a federal contracting database entry showing the U.S. Treasury Department slashed spending with ServiceNow by roughly $15 million due to a deferred resignation program. He cautioned that similar cuts might add to the 2026 headwinds for seat-based subscription models. (TipRanks)
Broker sentiment has cooled as the stock dropped. ServiceNow fell to a fresh 52-week low Wednesday after Oppenheimer cut its price target from $230 to $200, though it maintained an “outperform” rating, MarketBeat reported. (MarketBeat)
Not all the news has been negative. Biometric identity company authID announced it has rolled out an integration with ServiceNow to verify callers in contact centers running ServiceNow. The app will be available through the ServiceNow Store, the firm said. authID CEO Rhon Daguro emphasized the aim is to deliver “the highest degree of certainty” about caller identity before processing high-risk account changes. (GlobeNewswire)
Security concerns have also been in focus for the platform. ServiceNow fixed a critical flaw that might let attackers impersonate users, rolling out updates to most hosted instances after getting the alert in October, a TechRadar report said.
The broader U.S. market edged up on Thursday, though software stocks lagged. The S&P 500 gained 0.26%, but ServiceNow slid 2.56%. Salesforce dropped 2.52%, and Oracle declined 1.94%, according to MarketWatch data. (MarketWatch)
Some analysts see the trade as overly skewed. William Blair’s Arjun Bhatia labeled the Cowork-driven drop the “latest Boogeyman in software,” telling Barron’s the selloff “seems overdone.” According to the report, ServiceNow shares have fallen roughly 37% in the last year. (Barron’s)
The next move could depend on whether these concerns start appearing in actual figures. Investors will watch closely for signs of “seat” pressure creeping into renewals and any indication that federal-related cutbacks, such as the Treasury reduction, are spreading beyond a few isolated contracts.
ServiceNow plans to report its Q4 and full-year 2025 results after the market closes on January 28, followed by a conference call at 2 p.m. Pacific. Investors will zero in on subscription growth and current remaining performance obligations (cRPO)—essentially a backlog of contracted revenue yet to be recognized—for clues on demand heading into 2026. (ServiceNow Newsroom)
