ServiceNow Tops $1 Billion AI Contract Milestone Amid Revenue Growth
ServiceNow has reached an impressive milestone in its AI business, surpassing $1 billion in annual contract volume. This achievement comes as the company reported a strong second-quarter fiscal 2026 performance, with revenue increasing by 24% to $3.987 billion and subscription revenue growing 24.5% to $3.877 billion.
The company's AI usage among customers rose ninefold from Q1 to Q2 2026, and more than 50 customers now pay over $1 million for the new AI packages. ServiceNow consequently raised its own 2026 AI revenue target from $1 billion to $1.5 billion.
Analysts are racing to raise their price targets on the stock, with Needham's Mike Cikos increasing his target to $155 from $115 and Bernstein sitting at $248. The company trades at a premium to Salesforce and the broader US software sector, which investors must justify through superior top-line expansion and early AI traction.