New York, Feb 5, 2026, 11:47 EST — Regular session
ServiceNow Inc shares fell about 3.7% to $106.97 in late-morning trade on Thursday, after touching $105.43, as another round of selling hit U.S. software names. The stock was down $4.10 from its previous close of $111.07.
The drop comes with the S&P 500 software and services group still nursing a six-session slide that has erased about $830 billion in market value since Jan. 28, a move tied to fears that fast-moving AI tools will undercut the industry’s subscription model. Software-as-a-service, or SaaS, is the approach where customers pay recurring fees rather than buying a perpetual license.
“The market is questioning if the earnings-compounding nature of software companies would get disrupted,” said Manish Kabra, lead U.S. equities and multi-asset strategist at Societe Generale. He and others have pointed to leveraged investors unwinding positions and rising short interest across mid-to-large cap software, with ServiceNow falling in step with peers such as Salesforce and Microsoft. Reuters
Broader AI jitters have added to the drag. Alphabet fell after saying its capital expenditure could nearly double this year, and Qualcomm’s downbeat forecast also rattled investors focused on the payoff from big AI spending. “The AI trade that was the accelerant last year is perhaps the extinguisher this year,” said Melissa Brown, SimCorp’s managing director of investment decision research. Reuters
ServiceNow, which sells workflow and IT operations software on subscriptions, last week forecast fiscal 2026 subscription revenue of $15.53 billion to $15.57 billion and said it would launch a $2 billion accelerated share buyback after adding $5 billion to its repurchase authorization. “ServiceNow is growing both organically and by acquisition,” said Rebecca Wettemann, CEO of industry analyst firm Valoir. Reuters
In its fourth-quarter update, ServiceNow reported $3.466 billion of subscription revenue and said net new annual contract value for its Now Assist product more than doubled from a year earlier. The company also said its 5-for-1 stock split became effective on Dec. 17 and flagged deal activity, says it closed its Moveworks acquisition in December and intends to buy identity security firm Veza.
The stock has been a lightning rod since those results. A day after the report, ServiceNow slid 11% even though it raised its subscription revenue outlook, in a session when SAP’s underwhelming cloud outlook helped pull software shares lower and fed the broader debate about whether AI will dent demand for traditional vendors.
Some investors are starting to look again, cautiously. “This has been Software-mageddon,” said Art Hogan, chief market strategist at B Riley Wealth, after the software and services index tumbled 13% in the past week. Jake Seltz, a portfolio manager at Allspring Global Investments, said he has been adding “at the margin” to some holdings including ServiceNow. Reuters
But the downside case is still sitting on the tape: investors are trying to separate AI winners from AI casualties, and the story keeps shifting as new tools land in the market. Strategists say the industry’s future pricing power — and how quickly customers change what they buy — remains hard to handicap.
Next up, ServiceNow executives are slated to appear at the Bernstein TMT Forum on Feb. 25 and the Morgan Stanley TMT Conference on March 4. Investors will be listening for demand signals, and for how the company frames AI agents as both a threat and a sales pitch.
