New York, January 30, 2026, 12:53 PM EST — Regular session
- After tumbling 11% Thursday, ServiceNow shares held steady on Friday
- The company’s subscription revenue forecast for 2026 beat Wall Street expectations, yet jitters in the software sector kept investors cautious
- After a tough week for software stocks, traders are focused on buyback execution, AI partnerships, and how deals are being integrated
Shares of ServiceNow Inc barely moved, trading around $116.74 early Friday afternoon, following a steep drop right after earnings the day before.
The pause is significant as investors have rushed to offload subscription-based software stocks this week, despite earnings beating forecasts. The focus has turned to whether AI tools can boost demand quickly enough to justify the costs and if emerging “AI agent” products might replace traditional SaaS models.
Late Wednesday, ServiceNow set its fiscal 2026 subscription revenue forecast between $15.53 billion and $15.57 billion, beating the average analyst estimate of $15.21 billion, according to LSEG. The company also expects first-quarter subscription revenue to hit $3.65 billion to $3.66 billion, surpassing the $3.57 billion forecast. ServiceNow highlighted stronger AI collaborations with Anthropic and OpenAI. Valoir CEO Rebecca Wettemann noted the company is “growing both organically and by acquisition.” 1
Thursday’s sell-off showed no signs of easing. ServiceNow dropped 11%, while SAP tumbled over 16% after a disappointing cloud forecast. Microsoft slid too, weighed down by warnings of record AI expenses and slower cloud growth. Shares of Salesforce, Adobe, and Datadog also took hits. LPL Financial’s Adam Turnquist called it a “worst-case scenario” being priced in, and JPMorgan analysts noted that “the malaise in software sentiment persists.” 2
ServiceNow posted strong numbers, with fourth-quarter subscription revenue hitting $3.466 billion, up 21%, and total revenue reaching $3.568 billion, a 20.5% increase. Adjusted earnings came in at 92 cents a share. The company’s current remaining performance obligations (cRPO)—contracted revenue expected within the next year—rose to $12.85 billion, while total RPO, which covers a broader backlog, climbed to $28.2 billion. CEO Bill McDermott highlighted that ServiceNow “significantly beat Q4 expectations,” and CFO Gina Mastantuono emphasized the company’s continued “disciplined focus on margin expansion.” The board also greenlit an extra $5 billion for share buybacks, with a $2 billion accelerated repurchase set to kick off soon, a move that usually involves upfront purchases through a bank. 3
Investors remain concerned about the impact of enterprise buyers cutting IT spending or AI agents undercutting the value of traditional workflow subscriptions. Integration risks from recent and upcoming deals also loom large, particularly if customers resist price hikes or costs climb faster than revenue.
Traders are focused on two key indicators: if subscription growth matches the first-quarter forecast and whether backlog growth remains steady after a turbulent week for the sector. New analyst revisions on valuation or how fast AI is being monetized could trigger sharp moves in the stock.
Mark your calendar for Knowledge 2026 in Las Vegas, running May 5–7. Investors will zero in on product and customer updates that might clarify the next phase of the AI strategy — or highlight lingering challenges. 4
