NOW Stock Is Headed For Its Worst Week In Two Months — Will Q1 Results Bring Relief?

• ServiceNow is expected to report Q1 earnings results on April 22. 
• Analysts expect the company to report quarterly revenue of $3.75 billion, a 21% increase year-on-year. 
• ServiceNow provided a full-year estimate of subscription revenues to be between $15.53 billion to $15.57 billion.

ServiceNow Inc. (NOW) is headed for its worst week since Feb. 6th if losses deepen. The company’s shares are down 12% so far this week.

The selloff comes amid a wider decline in software stocks as investors remain wary about the impact of artificial intelligence on Software-as-a-Service (SaaS) stocks.

ServiceNow’s announcement earlier on Thursday about providing AI-enablement across its entire product portfolio seems to have had little impact on the stock, with selling pressure persisting. NOW stock was down about 8.3% at the time of writing.

Will Earnings Stoke A Reversal?

ServiceNow is expected to report first-quarter (Q1) earnings results on April 22. Analysts expect the Santa Clara, California-based company to report quarterly revenue of $3.75 billion, a 21% increase year-on-year, according to data from Fiscal.ai.

Meanwhile, in its previous quarterly report, the company said that it expects its subscription revenue to grow 21.5% in Q1 to between $3.65 billion and $3.655 billion. ServiceNow provided a full-year estimate of subscription revenues to be between $15.53 billion to $15.57 billion.

However, BTIG on Tuesday said that ServiceNow’s revenue growth guidance offered limited upside and appeared to be aggressive, with any potential outperformance likely to be driven by Now Assist Packs and mergers and mergers and acquisitions. The analyst also said that it believes the company’s subscription revenue growth estimates are too high, according to TheFly.

BTIG lowered the firm's price target on ServiceNow to $185 from $200 and kept a ‘Buy’ rating on the shares.

Meanwhile, Stifel analyst Brad Reback also lowered the price target on ServiceNow to $135 from $180, saying that data pointed to "a very weak" U.S.-Fed spending environment, adding that the company’s Q1 checks were "somewhat lackluster."

AI Pivot

ServiceNow on Thursday announced that its entire product portfolio would be AI-enabled. Every ServiceNow product would include AI, data connectivity, workflow execution, security, and governance built-in, the company said.

ServiceNow also introduced Context Engine to provide decision context and governance for AI agents, and new Build Agent tools that let developers create from any environment and deploy directly on the platform, enabling more autonomous workflows and improving enterprise-wide AI effectiveness.

Retail Take

On Stocktwits, retail sentiment around NOW stock remained in the ‘extremely bullish’ territory over the past 24 hours amid ‘extremely high’ message volumes.

One bullish user suggested buying the dip, noting that the company’s strong business fundamentals did not justify the selloff.

NOW stock has declined more than 39% this year, and was trading around 52-week intra-day lows at the time of writing.

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