New York, Feb 4, 2026, 11:29 AM EST — Regular session
- ServiceNow shares barely moved in late morning trading following a steep decline the previous day.
- The recent slump in software stocks is linked to renewed concerns that AI tools are infringing on established products.
- Investors are eyeing two upcoming executive appearances, searching for signals on demand and how competition is shaping up.
ServiceNow shares traded near $109.77 on Wednesday, holding steady after tumbling nearly 7% the day before. That drop pushed the stock well below its recent highs. (MarketWatch)
The renewed selling matters because ServiceNow is at the heart of a recurring debate: will new AI “agents” — software capable of taking action, not just answering questions — drive up enterprise IT budgets or pressure the vendors currently cashing in on them?
The debate has cornered volatility in a part of the market investors once saw as stable. At the same time, major software firms are grappling with how to maintain pricing power as AI tools improve and costs decline.
U.S. software stocks extended their losses Wednesday following what Reuters labeled a “wake-up call” linked to new plug-ins for Anthropic’s Claude Cowork agent. The S&P 500 software and services index has dropped nearly 13% over five sessions. Salesforce, CrowdStrike, Adobe, and Intuit slid further. J.P. Morgan’s Mark Murphy dismissed the leap from productivity tools to a complete overhaul of “mission-critical enterprise software” as “illogical,” while colleague Toby Ogg argued the sector was being “sentenced before trial.” (Reuters)
Nvidia CEO Jensen Huang dismissed the notion that AI will completely replace software tools, calling the idea “illogical” during a Cisco-hosted event in San Francisco, even as markets were reeling from a selloff. (Reuters)
ServiceNow’s timing couldn’t be more challenging. The company last week raised its fiscal 2026 subscription revenue forecast above analyst expectations and highlighted expanded collaboration with OpenAI and Anthropic. It also greenlit an extra $5 billion share buyback, including a $2 billion accelerated repurchase set to kick off immediately — where a bank swiftly purchases shares on the company’s behalf. (Reuters)
That said, the downside scenario is still getting plenty of attention: customers trying out AI-native tools might end up building more internally. Investors remain uncertain about how quickly “agentic” products will turn into steady revenue instead of just pilots and discounts. A wider tech sell-off wouldn’t make things easier either.
Investor events provide the next key markers. ServiceNow announced Group VP Lou Fiorello will present at the Bernstein TMT Forum on Feb. 25. Then, CEO Bill McDermott is set to speak at the Morgan Stanley TMT Conference on March 4.
Traders will be watching closely to see if the software sector holds steady. Any fresh AI product launches could trigger another round of selling before buyers step back in.
