The stock market has not been kind to enterprise software names over the past year.
Valued at a market cap of $98 billion, ServiceNow stock is down 60% from all-time highs. However, the pullback offers you an opportunity to buy the dip, as per Wall Street.
33 of 37 analysts covering the company rate ServiceNow (NOW) stock a “Buy”, with an average 12-month price target of $141, indicating an upside potential of 52%.
One analyst also expects the SaaS giant to more than double over the next 12 months, with a target price of $236.
Why ServiceNow remains a top tech stock
ServiceNow builds the software that large companies use to manage IT operations, employee requests, customer service, and more. Think of it as the engine running quietly in the background at most Fortune 500 companies.
The company reported nearly $13 billion in subscription revenue in 2025. Over the last five years, subscription sales have risen at a compounded annual growth rate of 24%.
The business has also held on to customers at a rate few peers can match.
ServiceNow’s Chief Financial Officer, Gina Mastantuono, noted the company has posted an average renewal rate of 98% for over 20 consecutive quarters, allowing it to generate stable cash flows.
Related: ServiceNow CEO sends blunt message on acquisitions
ServiceNow CEO Bill McDermott told analysts that the company is “blowing through $15 billion” in 2026 and laid out a target of more than $30 billion in subscription revenue by 2030.
Basically, the company sees a path to doubling in size in roughly four years.
ServiceNow bets big on AI
Here is where the story gets interesting for investors watching the broader AI debate in software.
The fear among some analysts is that AI could replace the very workflows that companies like ServiceNow charge for.
Notably, the company’s artificial intelligence product line, branded Now Assist, generated $750 million in annual contract value (ACV) in the first quarter of 2026, according to Mastantuono. The company raised its full-year AI ACV target to $1.5 billion.
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The idea is that AI does not replace the platform. It runs on top of it.
Mastantuono emphasized:
“We’re raising our 2026 AI ACV target from $1 billion to $1.5 billion. The demand we’re seeing is real. These are not features bolted on to existing products. They are built in. They’re solutions with strong adoption and measurable outcomes already.”
President and Chief Product Officer Amit Zavery made the case in blunter terms at the Analyst Day in May 2026.
He explained that customers building their own AI solutions typically spend five to 10 times more than using ServiceNow, when you factor in security, compliance, model updates, and integration work.
“Building an app is definitely not the same as running a business,” Zavery said.
A focus on the data business
ServiceNow is building out a suite of tools to help enterprises get their data “AI-ready.” This includes a database product called RaptorDB Pro, a data connectivity tool called Workflow Data Fabric, and a new analytics layer built partly through acquisitions.
RaptorDB Pro surpassed $100 million in ACV in under a year on the market, according to EVP Gaurav Rewari. Rewari said the data business is on track to surpass $1 billion in ACV within a few quarters.
He also made a point worth noting for investors thinking about competitive moats. ServiceNow does not require customers to move their data into its systems.
They can leave it in Snowflake, Databricks, SAP, or anywhere else. The platform pulls insights from where the data already lives.
“We don’t say you have to move all your data into our data cloud,” Rewari said. “What matters to us is knowledge gravity, not data gravity.”
That is a meaningfully different pitch than what many competitors offer.
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Is ServiceNow stock undervalued?
The growth story for ServiceNow stock is far from over:
- Analysts tracking ServiceNow stock forecast revenue to increase from $13.28 billion in 2025 to $29.74 billion in 2030.
- In this period, its free cash flow is projected to expand from $4.64 billion to $12.32 billion,
- If NOW stock is priced at 25x forward FCF, which is lower than its five-year average of 42x, it could more than triple over the next four years.
Wall Street appears to be pricing in a recovery for the SaaS stock. With 33 “buy” ratings and a consensus target implying more than 50% upside, Wall Street is extremely bullish.
The bear case rests on whether AI disrupts workflow software faster than ServiceNow can adapt to it. The bull case says the platform is precisely what AI needs to run safely inside large companies.
The next few quarters will go a long way toward settling that debate.
Related: Bank of America resets ServiceNow stock price target sharply