NOW Stock On Track To Snap 4 Sessions Of Losses – Bernstein Has An Interesting Take About AI’s Impact On ServiceNow’s Core Business

• Bernstein reiterated its ‘Outperform’ rating and a $219 price target, stating the company’s strengths are hard to replace by AI agents.
• The company is well-positioned as an enterprise AI platform, as large companies are unlikely to rely on a single AI provider, the report read.
• RBC Capital Markets cut its price target to $121 from $150 and maintained an ‘Outperform’ rating ahead of its first-quarter results.

Shares of ServiceNow (NOW) gained more than 6% on Monday, and are on track to reverse a four-session losing streak, after a Bernstein note allayed fears of artificial intelligence impacting the company’s core automation business.

While concerns have been raised that advanced tools from firms like Anthropic could replace ServiceNow’s core automation platform, Bernstein said most of the company’s automation processes require reliability, security, and strict controls, which are not well-suited to AI-based solutions, according to a report by Investing.com.

The firm reiterated its ‘Outperform’ rating and a $219 price target, implying a potential 187% upside from current levels.

ServiceNow Well-Positioned As An Enterprise AI Platform, Says Analyst

Coding tools also pose little threat, as the real value lies in the underlying systems, such as the Configuration Management Database (CMDB), that power these processes, the firm added.

The company is well-positioned as an enterprise AI platform, as large companies are unlikely to rely on a single AI provider due to concerns over flexibility, cost, and security. They also prefer strong underlying systems to support workflows, rather than standalone AI tools, the report read.

RBC Capital’s Price Target Change Reflects Overall Tech Weakness

RBC Capital Markets cut its price target on ServiceNow to $121 from $150 but maintained an ‘Outperform’ rating ahead of first-quarter (Q1) results, according to The Fly. The firm said sentiment in the software sector is very weak due to market volatility and growing concerns about competition from AI models.

It added that many investors are staying on the sidelines, making the sector difficult to own right now. Uncertainty around the macro environment, including the Middle East war, is also weighing on the outlook.

RBC expects most companies to report in-line results with unchanged guidance, offering little to improve sentiment in the near term.

ServiceNow is set to report Q1 results on April 22, with analysts expecting revenue of about $3.75 billion, up 21% year-on-year. The company previously guided for Q1 subscription revenue of around $3.65 billion and sees full-year subscription revenue reaching roughly $15.5 billion.

How Did Retail Traders React?

Retail sentiment on Stocktwits for NOW continued to trend in the ‘extremely bullish’ zone over the past 24 hours, amid ‘extremely high’ message volumes.

One user called it a textbook “bottoming and reversal.”

Last week, NOW stock recorded its biggest weekly decline in more than 10 years. On Friday, the stock fell to its lowest in over three years.

Another user said NOW at under $100 is a “lifetime opportunity.”

For updates and corrections, email newsroom[at]stocktwits[dot]com.