NOW Benefits From Enterprise AI Adoption: Buy, Sell, or Hold the Stock?

ServiceNow NOW shares have plunged 32% in the year-to-date period compared with the broader Zacks Computer & Technology sector’s return of 18.2%. The underperformance reflects delayed closings of several large on-premise deals in the Middle East due to ongoing conflict in the region, which created…

ServiceNow NOW shares have plunged 32% in the year-to-date period compared with the broader Zacks Computer & Technology sector’s return of 18.2%. The underperformance reflects delayed closings of several large on-premise deals in the Middle East due to ongoing conflict in the region, which created a 75-basis-point headwind to first-quarter 2026 revenues.

However, the company is benefiting from strong demand for workflow automation across Information Technology (IT), Human Resources (HR), Customer Relationship Management (CRM) and security, with large enterprise deals increasing. NOW is expanding agentic capabilities through offerings such as Autonomous Workforce and Build Agent Skills, which allow developers to deploy custom agents directly onto the platform with built-in controls.

In the first quarter of 2026, management framed ServiceNow as an artificial intelligence (AI) control tower addressing a total addressable market above $600 billion, supporting a multi-year opportunity across IT, employee, CRM, and security workflows.

NOW Benefits From Expanded AI Security Portfolio

ServiceNow is benefiting from its expanding AI security portfolio, positioning itself as a leader in enterprise security and workflow automation. In June 2026, ServiceNow partnered with Accenture ACN to launch AI-powered cybersecurity and risk management services designed to accelerate enterprise migration from legacy risk platforms.

ServiceNow, Inc. Price and Consensus

ServiceNow, Inc. price-consensus-chart | ServiceNow, Inc. Quote

The collaboration combines managed security services built on the ServiceNow AI Platform with Accenture’s AI-powered migration solution, enabling enterprises to automate risk management, strengthen cyber resilience and simplify security operations. The solution helps organizations reduce migration costs and operational complexity while accelerating the transition from legacy cybersecurity platforms.

The new offering expands ServiceNow’s AI-powered risk management capabilities across third-party, operational technology (OT) and compliance workflows, helping enterprises identify threats faster and improve cyber resilience

Strategic acquisitions like Armis and Veza expand ServiceNow’s capabilities in security, employee experience and identity governance. The Veza acquisition adds identity governance, while the Armis acquisition adds real-time asset discovery and cyber exposure management. Together, these moves expand the security portfolio and support cross-sell into existing workflow deployments. The company’s security and risk workflows were included in 15 of the top 20 deals in the first quarter of 2026, demonstrating strong customer demand for integrated security solutions.

NOW's Rich Partner Base to Drive Prospects

ServiceNow’s growing partner base, which includes Accenture, NVIDIA NVDA and International Business Machines IBM, is expected to drive its long-term growth prospects.

In the first quarter of 2026, ServiceNow expanded its partnership with NVIDIA to accelerate governed enterprise AI by integrating Autonomous Workforce with NVDA’s latest AI infrastructure. The companies previewed the integration of NVIDIA Enterprise AI Factory with ServiceNow AI Control Tower and introduced a joint benchmarking framework for voice and multimodal AI deployments.

In June 2026, ServiceNow expanded its collaboration with International Business Machines to help enterprises modernize legacy applications, unlock enterprise data and accelerate AI adoption at scale. The collaboration combines International Business Machines AI, data and automation capabilities with the ServiceNow AI platform to support application modernization, enterprise data governance and autonomous IT operations.

NOW Initiates Strong Q2 2026 Outlook

ServiceNow’s expanding AI portfolio and strengthening partner ecosystem is expected to benefit the company’s top-line growth. For second-quarter 2026, ServiceNow guided subscription revenues to $3.815-$3.820 billion, implying 22.5% year-over-year growth on a GAAP basis.

The Zacks Consensus Estimate for second-quarter 2026 revenues is pegged at $3.92 billion, indicating year-over-year growth of 22%.

The consensus mark for earnings is pegged at 86 cents per share, which has remained unchanged over the past 30 days. The figure implies a year-over-year decrease of 4.88%.

What Should Investors Do With NOW Stock?

ServiceNow's strong AI innovation, expanding security portfolio, strategic partnerships and robust enterprise demand position it well for long-term growth.

However, macroeconomic uncertainty, geopolitical tensions, potential delays in enterprise deal closures and stiff competition in the enterprise software market remain concerns that investors should monitor.

ServiceNow currently carries a Zacks Rank #3 (Hold), suggesting that investors may want to wait for a more favorable entry point in the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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