New York, May 28, 2026, 16:02 EDT
ServiceNow Inc. shares jumped in late New York trade Thursday, outperforming the S&P 500 and Nasdaq as buyers moved into AI-related enterprise software stocks. The shares last changed hands at $109.43, up $7.31. The S&P 500 was up 0.59% and the Nasdaq Composite gained 0.90%, according to Reuters market data.
Software stocks have been a trouble spot this year, so the move is getting attention now. Investors keep asking if AI lets companies like ServiceNow sell more products or if it takes over software work that brings in revenue. Reuters said earlier this month that software firms were working to rebound after “battered” stocks on worries about AI. Mizuho’s Gregg Moskowitz called software “very attractive” for investors who can wait. Reuters
Snowflake shares jumped more than 33% Thursday after the data software company lifted its annual revenue outlook and said it signed a five-year, $6 billion agreement with Amazon Web Services. Investors took the AWS deal as evidence some cloud software companies are converting AI demand into sales. “It just shows how quickly sentiment can turn when AI helps the top line,” said Matt Britzman, senior equity analyst at Hargreaves Lansdown. Reuters
ServiceNow didn’t land the new contract, but the stock still got caught up in the move toward software companies that have a strong spot in enterprise workflows—firms Wall Street thinks can use AI rather than lose out to it. Bank of America analysts, quoted by Reuters this month, kept a buy on ServiceNow. They said the company is “too entrenched” in big company workflows and called it “difficult to challenge.” Reuters
Mixed signals on AI and enterprise software. Snowflake delivered on AI, giving investors some confidence, but Salesforce dropped after its revenue outlook fed concerns about AI risks and slowing growth. That split showed up in Thursday’s action, with only select software stocks rallying instead of a broad move.
ServiceNow’s last set of quarterly numbers left the bull-bear argument unresolved. Subscription revenue hit $3.671 billion for the first quarter, up 22% from the year before, while total revenue matched the pace at $3.770 billion, up 22%. The cRPO figure—revenue the company expects to book over the coming year—was up 22.5% at $12.64 billion. CEO Bill McDermott said in April that the company’s “AI growth is far exceeding even our own expectations.” ServiceNow Newsroom
ServiceNow is pushing to position itself as the main control layer for enterprise AI. At its May analyst day and Knowledge conference, the company said it’s aiming for more than $30 billion in subscription revenue by 2030. It expects over 30% of annual contract value to come from AI. Jon Sigler, EVP and general manager of AI Platform, said there’s a “major gap between adoption and accountability” for enterprise customers. ServiceNow Newsroom
But there’s still a question. ServiceNow has yet to show that AI can drive stickier revenue faster than it brings cost or pressures margins. Reuters said in April that Middle East government deals were delayed, which slowed first-quarter subscription growth, and the Armis deal is forecast to hit 2026 free cash flow margin by about 200 basis points. That’s one-hundredth of a percent per point. COO Amit Zavery told Reuters, “I am not worried about the narrative,” though he also said there is no visibility on when conflicts in the region might end. Reuters
Thursday’s jump looks more like a reset than a final call. ServiceNow’s AI pitch is back in demand with investors after a tough run for software-as-a-service names—firms selling cloud software by subscription. The real test is still ahead: turning governance, workflow automation, and AI agent talk into billings, not just better slides at conferences.
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