ServiceNow Shares Surge as Salesforce Puts AI to the Test
ServiceNow shares surged 33% in August following strong quarterly results from fellow enterprise software company Salesforce. The AI-powered 'Agentforce' tool achieved an annualized revenue run rate of $3.9 billion, up 210% from the year-ago quarter.
Salesforce's second-quarter revenue rose to $11.3 billion, ahead of consensus estimates, and its non-GAAP earnings per share of $5.90 far outpaced Wall Street's average estimate. The company also issued strong revenue guidance for its full fiscal 2027, with revenue estimates of about $46.3 billion, representing a nearly 12% increase from 2026.
Analysts at Bank of America and BTIG Research raised their price targets for ServiceNow stock to $150 and $170 respectively, maintaining buy ratings. However, investors remain cautious about the impact of AI on traditional software companies, and ServiceNow's shares will likely remain volatile until investors settle on how well the company is adapting.