NEW YORK, May 19, 2026, 08:04 EDT
ServiceNow jumped 8.8% to $103.44 on Monday, its biggest daily move in about a year, after Bank of America restarted coverage with a Buy. The analyst argued the workflow-software company stands to benefit from the growth of AI agents, not be sidelined by them. Salesforce got a different call from the same team: Underperform. That stock still added 3.4%.
Bank of America’s take gave software stocks a pop for a day, after worries about AI kept weighing on the sector. The fear is simple: if AI can write code and do tasks, companies might see less need for some types of software. But BofA said businesses will still want systems to control who can do what, sign off on work and hold records.
Bank of America’s Tal Liani put a $130 price target on ServiceNow, saying the company should “benefit from, rather than be replaced by, new AI solutions.” The basic call is that ServiceNow could serve as a control layer for AI agents—software that acts for users—instead of being an app that automation just runs over. Investing.com
Salesforce split stood out. Liani restarted coverage at Underperform, putting a $160 target on the shares, and pointed to slower customer growth, soft upsell trends, and a harder outlook for Agentforce, the company’s AI tool. He wrote that Salesforce is “transforming from a historically high growth platform to a mature cash generator.” Investing.com Nigeria
ServiceNow provides cloud software for companies to manage work in IT, employee services, customer support, and more. According to BofA, AI agents may drive demand for orchestration — rules, permissions, approvals, and audit trails that set what automated systems can do.
ServiceNow handed investors new numbers last month. First-quarter subscription revenue came in at $3.671 billion, a 22% jump from last year, while total revenue was $3.770 billion. The company’s current remaining performance obligations, or contracted revenue due within the next year, climbed 22.5% to $12.64 billion.
ServiceNow said customers spending over $1 million a year on its Now Assist generative AI tools jumped more than 130% from a year earlier. CEO Bill McDermott said first-quarter results topped the top end of guidance “once again,” and called the platform an “AI control tower” for customers running across different models, clouds, and systems. ServiceNow Investor Relations
AI-powered workflow tools are forcing ServiceNow and Salesforce into tighter competition, BofA said. Adobe and Shopify are also seeing more pressure in marketing and commerce. The shifts mean customers could start asking more from vendors, but spend less on legacy software.
Some gaps remain. ServiceNow said subscription revenue growth in the first quarter was hit by about 75 basis points after several big Middle East on-premises deals closed later than planned. Chief Operating Officer Amit Zavery told Reuters the company now expects those deals to go through over the year. “I am not worried about the narrative,” he said, mentioning that non-seat-based pricing—where revenue tracks platform use, not just licenses—is becoming more important. Reuters
The Armis cybersecurity buyout brings some pressure. ServiceNow said the move will hit full-year free cash flow margin by around 200 basis points and trim operating margin by about 75 basis points, despite improving some revenue growth metrics. A basis point equals one-hundredth of a percentage point.
For now, BofA’s note has set the tone for enterprise software stocks. ServiceNow’s bounce hasn’t settled the AI-disruption question but has shifted it. Investors are still waiting to see if AI oversight and usage pricing make up for slower deals, higher acquisition spending and increased competition from Salesforce and rivals.
