ServiceNow Stock Notches Best Day In A Year As SaaS Rebounds

• NOW closed at $103.42 on Monday, reclaiming the key $100 level for the first time in a month.
• Investors appear to be rotating funds back into the beaten down software names, with major stocks ZS, CRM, CRWD and ADBE gaining sharply on Monday.
• On Stocktwits, retail sentiment for NOW shifted to ‘extremely bullish’ from ‘bullish.’

ServiceNow (NOW) stock jumped 8.8% on Monday and gained further in the overnight session, after Bank of America reinstated coverage on the stock with a ‘Buy’ rating and optimism around President Donald Trump building a stake in the company. 

NOW’s rally, its strongest in a year, lifted the stock’s three-day gain to 19%, marking a sharp rebound for shares that had languished for months amid persistent selling pressure across software companies. NOW closed at $103.42 on Monday, reclaiming the key $100 level for the first time in a month.

Several other software stocks also posted gains on Monday, signaling what appeared to be a rotation back into SaaS shares. ZScaler rose 8.5%, Salesforce gained 3.4%, CrowdStrike gained 4.2%, and Adobe gained 3.3%. Workday and Autodesk stocks also ended higher.

BofA Highlights AI Opportunity For NOW

BofA reinstated coverage of ServiceNow with a $130 price target, which implies an upside of over 20% from the stock’s last close. While AI is disrupting the software landscape, BofA said it believes ServiceNow stands to benefit from, rather than be replaced by, new AI solutions.

ServiceNow's depth and breadth of workflow entrenchment "uniquely position it to benefit" from any deployment of autonomous agents across IT, employee, and customer workflows, the research firm said in its investor note, according to a summary on The Fly.

BofA also reinstated coverage on Salesforce with an ‘Underperform’ rating and a $160 price target. That target is 11% below current trading levels.

NOW’s Trump Bump

Trump’s backing of ServiceNow emerged as the bigger catalyst driving the sentiment among retail investors.

Last week, a disclosure released by the U.S. Office of Government Ethics said President Doanld Trump invested in a plethora of software and technology stocks in the first quarter. On Feb. 10, Trump purchased between $1 million and $5 million worth of shares of ServiceNow, Adobe, and Workday.

Retail View On NOW

On Stocktwits, the retail sentiment shifted to ‘extremely bullish’ from ‘bullish.’

“In all seriousness, Trump buying a stock is an infinitely better indicator than any TA or underlying thesis (though NOW is oversold technically and seemingly game theory wise as well),” said a trader. 

The Relative Strength Index reading on NOW is 60.93, per Koyfin. An RSI of 70 and above signals that the stock is oversold.

Another wrote: “$NOW unless you have extremely limited funds there is no reason to sell common shares for awhile. We are still under Trump’s reported average, Jensen loves it, and it’s both technically and narratively oversold.”

ServiceNow shares are down 32.3% year to date.

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