ServiceNow is drawing higher price targets after analysts said enterprise spending is stabilizing and early AI-related product adoption is starting to build, even as questions linger over pricing and how quickly customers will translate AI investments into revenue.
ServiceNow gets higher targets on AI adoption
Stifel raised its forecast on the stock to $160 from $120 and UBS lifted its target to $150 from $110, with both firms pointing to a modest sequential improvement in the spending backdrop. The call reflects stronger deal activity, solid renewal momentum and rising adoption of ServiceNow’s Advanced SKUs, which are helping offset a still-cautious buying environment.
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The outlook matters because ServiceNow sits at the intersection of enterprise software and the broader corporate AI buildout. If customers keep expanding workflow automation and AI-enabled offerings, it can support subscription growth, consumption revenue and longer-term pricing power across the platform. That is especially important for investors watching whether AI spending is becoming a real budget line item rather than just an experimental expense.
Stifel said early signs also point to improving consumption trends, broadly in line with management’s expectations. It added that U.S. non-Department of Defense federal business was roughly flat in the third quarter, with a large Veterans Affairs contract renewal creating some volatility, though that headwind could be more than offset by a nine-figure U.K. public-sector win.
The analyst sees fourth-quarter upside in cRPO growth of at least about 200 basis points, after reported constant-currency cRPO growth of 22% topped guidance for roughly 20%. Even so, management is expected to stay conservative in its outlook, a familiar stance for a company trying to balance long sales cycles, AI adoption uncertainty and investor expectations.
ServiceNow also used Tuesday to unveil AI Workflow Factory and Autonomous Engineer, new tools aimed at helping enterprises identify AI-driven improvements and deploy workflows faster while keeping governance through its AI Control Tower. The company highlighted India as a key market for governed enterprise AI transformation, signaling that the next phase of growth may come from broader international rollout as well as U.S. customer upgrades.
Shares were up 0.81% at $137.19 on Tuesday, though the stock remains well below recent highs. Technically, the shares sit above the 50-day moving average but remain below the 200-day average, while RSI readings have recovered to neutral territory after earlier oversold levels.
Investors will now focus on whether the new AI tools and steadier enterprise budgets can turn into sustained cRPO growth and a firmer guide for 2026.
| Entity | Gains | Losses |
|---|---|---|
| ServiceNow | ▲Higher price targets, AI adoption momentum | ▼Pricing skepticism, conservative guidance |
| Enterprise customers | ▲Faster workflow automation | ▼Higher software spend |
| U.K. public sector / ServiceNow | ▲Large contract win | ▼Competing vendors |
| NOW bears | ▲Less downside if AI traction builds | ▼Valuation reset on improving demand |
