ServiceNow (NOW) Stock Jumps 6% on AI Optimism and Analyst Upgrade

TLDR

• NOW stock rose ~5.6% on Tuesday, trading around $104.97
• BNP Paribas upgraded the stock to Outperform, boosting investor confidence
• ServiceNow launched a new AI-powered Autonomous Workforce platform
• Zevenbergen Capital raised its stake by 341.8%, adding 472,619 shares
• Fed Chair Powell signaled no imminent rate hike, easing broader market pressure

ServiceNow stock climbed around 5.6% on Tuesday, bouncing off levels close to its 52-week low. The move came as investors weighed a combination of positive catalysts after months of heavy selling.

ServiceNow, Inc., NOW

The stock has dropped 44% over the past six months. That selloff was driven largely by fears that AI would displace traditional SaaS platforms — a wave of pessimism that hit the broader software sector hard.

But sentiment appears to be shifting. Investors are now starting to view ServiceNow as a potential winner from AI adoption, not a casualty of it.

A key driver of Tuesday’s rally was a rating upgrade from BNP Paribas, which moved the stock to Outperform. That kind of institutional endorsement tends to draw fresh attention from both retail and professional investors.

ServiceNow also recently launched its AI-powered Autonomous Workforce platform. The product is being positioned as a tool that puts the company at the center of enterprise AI deployment, rather than in competition with it.

Adding fuel to the move, the company announced a $5 billion share repurchase program. Buyback announcements are generally read as a sign that management believes the stock is undervalued.

Institutional Buying Picks Up

Zevenbergen Capital Investments increased its position in NOW by 341.8% during the fourth quarter. The firm now holds 610,885 shares worth roughly $93.6 million, making ServiceNow its 15th-largest holding at around 2.1% of its portfolio.

Several other institutions also added to their positions in recent quarters. As of the latest data, 87.18% of ServiceNow stock is held by institutional investors and hedge funds.

On the earnings front, ServiceNow beat Q4 estimates. The company reported EPS of $0.92 versus the $0.89 consensus, and revenue came in at $3.57 billion — up 20.7% year-over-year and ahead of the $3.53 billion estimate.

Analysts currently forecast full-year EPS of $8.93 for the company.

Analyst Targets Remain Well Above Current Price

The consensus rating on NOW sits at “Moderate Buy,” with an average price target of $192.61 — nearly double where the stock is trading now. Of the analysts covering the stock, 32 have Buy ratings, three have Strong Buy ratings, five are at Hold, and two have Sell ratings.

Stifel has a $180 target with a Buy rating. Arete Research set a $200 target. Needham reaffirmed its Buy rating with a $155 target.

Macro Backdrop Helped Too

Federal Reserve Chair Jerome Powell said on Monday that the inflation outlook remains manageable and that a rate hike is not currently on the table — despite rising energy costs tied to ongoing tensions in Iran. That comment helped lift sentiment across the broader tech sector.

The 50-day moving average sits at $112.44, below the 200-day average of $149.20 — a bearish technical setup that suggests the stock still has ground to recover. The company carries a market cap of $109.80 billion and a P/E ratio of 62.93.

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