New York — Friday, December 26, 2025, 3:01 p.m. ET. U.S. equities are moving cautiously in a thin, post-Christmas trading session, with major indexes hovering near record territory and volume still muted. Reuters described Friday’s tape as largely “catching its breath” after a strong run into the holiday, with the Dow, S&P 500 and Nasdaq moving only slightly as traders weigh year-end positioning more than fresh catalysts. [1]
Against that backdrop, ServiceNow, Inc. (NYSE: NOW) is back on investors’ radar for a different reason: not a quarterly print, but a big-ticket cybersecurity acquisition just days after the company completed a 5-for-1 stock split—a combination that can amplify headline confusion and intensify debate around strategy, valuation, and execution risk.
As of the latest available trade data this afternoon, ServiceNow shares were around $153.67, up roughly 0.7% on the day, after trading between $152.02 and $154.45.
Why ServiceNow stock is in focus in today’s market
While the broader market is drifting near highs into the final trading days of 2025, ServiceNow has its own catalysts that matter more than the day’s index-level noise:
- A blockbuster M&A announcement: ServiceNow agreed to buy cybersecurity firm Armis for $7.75 billion in cash, its largest deal to date. [2]
- A recent 5-for-1 stock split: The split began trading on a split-adjusted basis on December 18, 2025, which changes the “sticker price” but not the underlying value of the company. [3]
- Macro crosscurrents: Rate expectations, year-end rebalancing, and sector rotation are shaping how investors price high-quality software names into 2026. Reuters reports the S&P 500 is pressing toward the 7,000 milestone while traders watch for Fed signals and rotation beyond megacap tech. [4]
In other words, today’s ServiceNow story is less about a single session’s tick-by-tick move and more about what investors believe NOW will look like in 2026 and beyond: organic growth engine, margin trajectory, and whether acquisitions are strengthening—or distracting from—the core platform.
The Armis deal: what’s confirmed, what’s strategic, and what Wall Street is debating
The confirmed terms
ServiceNow says it has entered into an agreement to acquire Armis for approximately $7.75 billion in cash (subject to customary adjustments). The company expects to fund the transaction with a mix of cash on hand and debt, and it expects the transaction to close in the second half of 2026, subject to regulatory approvals and other conditions. [5]
Why Armis matters to ServiceNow’s platform thesis
Armis positions itself in cyber exposure management and cyber-physical security—visibility and risk prioritization across IT, operational technology (OT), medical devices, and connected environments. ServiceNow is framing Armis as a way to connect real-time asset intelligence with workflow-based remediation, turning security findings into action across enterprises and government. [6]
ServiceNow’s messaging is explicit: the company believes the combination can create an end-to-end security exposure and operations stack that can “see, decide, and act” across the technology footprint, and it says the acquisition is expected to more than triple ServiceNow’s market opportunity for security and risk solutions. [7]
What executives and industry voices are saying
- Amit Zavery (ServiceNow president, COO, and chief product officer) framed the deal around trust and governance in the “agentic AI” era—arguing that cross-cloud, cross-asset governance is becoming non-negotiable for enterprise AI at scale. [8]
- Yevgeny Dibrov (Armis co-founder and CEO) emphasized the pace of AI-driven threat evolution and said the combined platform can help customers see risk in context and act before incidents occur. [9]
- Larry Feinsmith (JPMorgan Chase, Global Tech Strategy, Innovation & Partnerships) said the combination can provide a dynamic view of connected technology assets along with an AI/agentic blueprint to secure and enable trusted AI—an endorsement that will resonate with CIO/CISO audiences. [10]
The skeptical side: “Is ServiceNow leaning too hard on M&A?”
This is where the stock-market debate sharpens.
Reuters reported that ServiceNow shares dipped on the Armis announcement as investors processed the company’s recent acquisition pace. Importantly, ServiceNow CFO Gina Mastantuono told Reuters that, with Armis, the company’s security stack would be well positioned—suggesting it wouldn’t need further security M&A. [11]
Reuters also quoted Rebecca Wettemann, CEO of advisory firm Valoir, describing the buying spree as a push to get ahead on orchestration and governance by acquiring IP, leadership, and customers. [12]
That framing helps explain the split market reaction: some investors see Armis as a strategically coherent security layer for an AI-first enterprise workflow platform; others see integration risk, debt funding, and “growth-by-acquisition” optics.
A CIO-focused analysis captured this tension: while many practitioners and analysts applauded the move, they also warned it could nudge buyers away from “best-of-breed” security stacks and toward suites where components may be merely “good enough.” [13]
Don’t be misled by the lower share price: the 5-for-1 split changed the optics, not the business
If you’ve followed ServiceNow for years, the most confusing part of current coverage is simple: prices and price targets suddenly look five times smaller.
ServiceNow shareholders approved a 5-for-1 stock split in early December. The company stated that shareholders of record as of December 16, 2025 would receive four additional shares per share held, distributed after market close on or about December 17, with split-adjusted trading expected to begin December 18. [14]
What that means in practice:
- A pre-split share price around ~$770 would translate to roughly ~$154 split-adjusted (770 ÷ 5).
- Pre-split analyst targets and chart levels must be interpreted the same way.
This matters today because some mid-December headlines (including downgrade notes and deal rumors) were published before the split took effect—so you may still see pre-split prices referenced in older commentary.
The fundamentals backdrop: strong Q3 growth, rising guidance, and “AI platform” positioning
Before the market got consumed by deal talk, ServiceNow’s most recent quarterly results painted the picture of a company still growing at scale.
In its Q3 2025 release (for the quarter ended September 30, 2025), ServiceNow reported:
- Subscription revenue of $3,299 million, up 21.5% year over year (20.5% in constant currency)
- Total revenue of $3,407 million, up 22% year over year (20.5% in constant currency)
- Current remaining performance obligations (cRPO) of $11.35 billion, up 21% year over year (20.5% in constant currency)
- Remaining performance obligations (RPO) of $24.3 billion, up 24% year over year (23% in constant currency) [15]
The company also said it raised 2025 subscription revenue, operating margin, and free cash flow guidance, and it highlighted an expectation of 250 basis points of free cash flow margin expansion year over year. [16]
This fundamental foundation is why “deal risk” is such a live question for NOW investors: the core business has been producing high growth and profitability metrics—so the market wants proof that acquisitions are accelerants, not distractions.
Analyst forecasts and price targets: where expectations sit after the split
Wall Street’s outlook on ServiceNow is still broadly constructive—though less uniformly so after the mid-December volatility.
A compiled view of analyst forecasts shows a consensus that skews bullish, with an average price target around the low-to-mid $200s on a split-adjusted basis (and a wide range between low and high targets). [17]
Meanwhile, individual note flow has highlighted the split-adjustment issue explicitly. For example, Stifel cut its published price target from $1,150 to $230—not as a negative call, but as a mathematical adjustment reflecting the 5-for-1 split. [18]
On the bearish-to-cautious side, ServiceNow was also swept into a broader software debate about AI disruption risks. KeyBanc’s downgrade of ServiceNow (along with Adobe) emphasized AI-related uncertainties and set a $775 pre-split target—roughly $155 split-adjusted. [19]
Takeaway for readers: when comparing forecasts, always confirm whether the target is pre- or post-split—especially for notes dated before December 18.
Additional headline investors may have missed: CEO contract extension
Another governance headline arrived the same week as the Armis deal.
Nasdaq reported that ServiceNow disclosed an amendment to CEO Bill McDermott’s employment agreement, confirming he will remain with the company through at least December 31, 2030, with the amendment effective January 1, 2026. [20]
For long-term holders, this can cut two ways:
- Bulls may see continuity and strategic consistency during a period of platform and M&A evolution.
- Skeptics may question whether leadership stability also entrenches a deal-driven playbook.
What investors should watch into the close—and before the next market session
Because the NYSE is still open at the time of writing (3:01 p.m. ET), the practical question is what could matter between now, the close, and the next session—especially in a market where liquidity can be thinner and moves can be exaggerated.
Here’s the checklist that matters most for NOW shareholders and watchlist investors:
1) Any new detail on Armis integration and financing
ServiceNow has already said it plans to fund the deal through cash and debt and expects closure in 2H 2026. The next “market-moving” layer would be specifics: integration milestones, product bundling plans, retention packages, and whether the company signals any change to its margin or buyback posture. [21]
2) Signals on M&A pace going forward
CFO Gina Mastantuono’s comment to Reuters that ServiceNow wouldn’t need more M&A in the security space is a meaningful attempt to reassure investors worried about deal velocity. If subsequent commentary reinforces that message, it may help stabilize the narrative. [22]
3) The macro calendar next week: Fed minutes and rate expectations
Reuters highlighted that Fed minutes next week could provide more clarity on the rate path. That matters for long-duration growth stocks (including enterprise software), where valuation is often sensitive to rate expectations. [23]
4) Year-end positioning and “rotation” effects
Reuters also noted investors watching rotation as non-tech areas have been shining at points even while the broad market stays strong. In this environment, single-stock catalysts (like M&A) can dominate—yet sector flows still influence what investors are willing to pay for software multiples. [24]
5) A simple but crucial reference point: the 52-week context
MarketWatch noted that ServiceNow recently closed well below its 52-week high—a reminder that, despite today’s modest green print, the stock has been working through a drawdown and headline-driven volatility. [25]
Bottom line: ServiceNow’s next chapter hinges on “platform + security + AI”—and execution will be the judge
ServiceNow stock is trading in a market that’s calm on the surface—near record highs, thin holiday volume—but the company itself is in an unusually high-consequence moment: integrating an AI platform narrative with a major cybersecurity bet, just after a stock split that resets price optics.
If the Armis acquisition strengthens ServiceNow’s ability to turn security exposure into workflow execution across IT and OT environments, the deal can reinforce the “AI control tower” thesis the company is selling. If integration drags, debt funding spooks investors, or organic growth decelerates, the market’s skepticism around a large acquisition spree could reassert itself quickly.
References
1. www.reuters.com, 2. www.reuters.com, 3. newsroom.servicenow.com, 4. www.reuters.com, 5. newsroom.servicenow.com, 6. newsroom.servicenow.com, 7. newsroom.servicenow.com, 8. newsroom.servicenow.com, 9. newsroom.servicenow.com, 10. newsroom.servicenow.com, 11. www.reuters.com, 12. www.reuters.com, 13. www.cio.com, 14. newsroom.servicenow.com, 15. www.servicenow.com, 16. www.servicenow.com, 17. stockanalysis.com, 18. www.investing.com, 19. finance.yahoo.com, 20. www.nasdaq.com, 21. newsroom.servicenow.com, 22. www.reuters.com, 23. www.reuters.com, 24. www.reuters.com, 25. www.marketwatch.com
