NEW YORK, April 13, 2026, 08:09 EDT
- UBS downgraded ServiceNow to neutral from buy and sharply lowered its price target—now $100 instead of $170—pointing to AI disruption risk and softer demand for non-AI software.
- ServiceNow shares were indicated at $83.00 before the bell on Monday, a drop of 7.6% from where they closed previously. That puts the stock roughly 44% lower for 2026 to date.
- ServiceNow is now threading AI, data connectivity, workflow execution, security, and governance throughout its product suite. Bernstein stuck with its Outperform rating on Monday.
ServiceNow was on track for another sluggish open Monday, following a downgrade from UBS. The bank flagged sharper headwinds from accelerating AI technology and shrinking budgets for non-AI software—risks it hadn’t previously priced in. Shares changed hands at $83.00 ahead of the New York open, a 7.6% drop from the last close.
This call is drawing attention to ServiceNow as a kind of bellwether, highlighting how legacy software names hold up as AI moves further into areas like customer support, workflow automation, and even coding itself. It landed smack in the middle of a broader software downturn, with investors reassessing whether generative AI could threaten the premium that software firms have historically charged for subscriptions.
UBS dropped its rating on the stock to neutral, down from buy, and chopped its price target to $100 from the earlier $170. Analyst Karl Keirstead said the firm’s “confidence … has weakened” as more customers start voicing plans to pare back on traditional software spending. According to reports on the note, UBS now expects end-2026 growth for current remaining performance obligations—contracted revenue set to be recognized in the next year—to come in at 16%, a cut from the previous 20%. Investopedia
UBS is flagging Customer Service Management, about 10% of ServiceNow’s revenue, as a standout risk. If AI ends up slashing customer-support headcount and seat demand, that segment could take a hit. The bank also pointed out that enterprise spending keeps drifting toward AI infrastructure and data bills, squeezing what’s left for the rest of the software stack.
ServiceNow isn’t wasting time. The company announced April 9 that AI, data connectivity, workflow tools, security, and governance will now come standard with every product. President and chief product officer Amit Zavery said customers will “start with a complete AI-native experience,” ditching what he called “a procurement project.” ServiceNow Newsroom
The defense comes on the heels of a bullish January projection. ServiceNow put its 2026 subscription revenue target between $15.53 billion and $15.57 billion—topping what analysts had in mind—after posting a 20.5% jump in fourth-quarter revenue compared with the prior year. At the time, Rebecca Wettemann, CEO of Valoir, pointed out the company’s expansion, “both organically and by acquisition,” as it chased a larger market. Reuters
ServiceNow isn’t alone in feeling the squeeze. Software players like Salesforce, Adobe, and Atlassian also took hits as investors took a harder look at how fast AI might push up the stack. “Whether AI spells the end of the software business is an open question,” said Michael Clarfeld, portfolio manager at ClearBridge Investments. Reuters
UBS isn’t winning over every skeptic. Back in March, BNP Paribas bumped the stock higher, citing strong progress in AI monetization and annualized contract sales for Now Assist topping $600 million. Bernstein, for its part, stuck to an Outperform this Monday and kept its $219 target, saying big clients remain focused on predictability, auditability, and security when it comes to adopting AI.
ServiceNow faces a real risk: the revamped packaging might not prevent clients from switching to lower-cost, AI-native alternatives—or just trimming headcount on existing contracts. The next clear signal comes April 22, when first-quarter numbers hit.
