ServiceNow Stock Bounces Back as AI Fears Tame Down
Shares of ServiceNow (NOW) jumped last month as investors began to shake off their fears about artificial intelligence threatening traditional software companies.
The 'SaaS-pocalypse' fear factor has been a concern for many software stocks this year, but Salesforce's recent quarterly results helped calm those nerves. In its second-quarter earnings report, Salesforce reported revenue of $11.3 billion, surpassing consensus estimates and sending shares up 33% in August.
Salesforce's AI 'Agentforce' achieved an annualized revenue run rate of $3.9 billion, a 210% increase from the previous year's quarter. This success story is particularly important for ServiceNow investors, as the company also has its own AI agents that automate tasks and streamline workflows.
Bank of America analyst Tal Liani recently raised his price target for ServiceNow to $150, while BTIG Research analyst also increased their target to $170. However, despite this optimism, ServiceNow stock is likely to remain volatile until investors settle on the impact of AI on software companies.