New York, May 18, 2026, 18:03 (EDT)
ServiceNow climbed 8.8% Monday to close at $103.42. Bank of America’s Tal Liani put coverage back on the stock, giving it a Buy and a $130 price target. Shares hit $104.68 during the day, with 50.74 million shares changing hands, outpacing the 27.71 million average.
ServiceNow has faced doubts about AI—whether it will boost enterprise software platforms or simply replace what they offer. BofA’s recent call steered the market in favor of the first view, at least for now, giving the stock some relief.
BofA’s Liani said ServiceNow is set to gain from the AI shakeup in software and won’t be swapped out for new AI tools. She pointed to the company’s part in routing work, approvals and controls for large firms. Workflow orchestration is just getting tasks lined up, approved, tracked and audited across systems.
Tech shares stayed under pressure from Treasury yields and oil, pushing the Nasdaq down 0.51% and the S&P 500 off 0.07% Monday. ServiceNow bucked the move in a weak session.
BofA kept a Buy on ServiceNow and rated Salesforce Underperform, pointing to more overlap in software from AI, but Salesforce climbed 3.4% on Monday with a bounce in application-software stocks. The broker saw the competitive lines shifting.
ServiceNow has struggled in the market. The shares are still off by about a third so far this year, even with Monday’s gain. Investors have been selling across the sector, worried that AI agents could allow customers to get by without traditional software subscriptions.
ServiceNow’s last earnings update gave bulls a lift. First-quarter subscription revenue hit $3.67 billion, up 22% year-on-year. Total revenue reached $3.77 billion. ServiceNow raised its full-year subscription revenue guidance. The company also reported that the number of customers spending over $1 million a year on Now Assist more than doubled, rising over 130%.
But risk isn’t small. Last month, Reuters said that delays in Middle East government deals weighed on subscription revenue growth by 75 basis points; a basis point means one-hundredth of a percent. COO Amit Zavery told Reuters he still thinks those deals will close through the year, but added, “We don’t know when these conflicts will get sorted out.” Reuters
Margins are in focus. Reuters said ServiceNow’s $7.75 billion Armis deal is set to trim its fiscal 2026 free cash flow margin by 200 basis points and second-quarter operating margin by roughly 125 basis points. That could pressure results if more big deals get delayed.
AI pitch is front and center for investors. ServiceNow used its Knowledge 2026 event this month to say Action Fabric will let AI agents—built using ServiceNow, Claude, Copilot or in-house tech—carry out governed actions on its platform. Elsewhere, Zavery said AI Control Tower “governs the entire AI lifecycle” for agents, models, data and identity. ServiceNow Newsroom
There are clear risks. Buyers might move slowly on AI governance tools, prices could get squeezed, or AI could mean companies need fewer software seats. ServiceNow also flagged delays, regulation shifts, and questions around demand as reasons why results might fall short of what’s expected.
Monday’s rally only restarts the debate. The numbers haven’t changed yet. Investors will watch the next reporting cycle for bookings, usage-based revenue, and solid deal closure to see if ServiceNow’s AI-control strategy can hold up as real growth.
