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ServiceNow Upgraded as AI and Security Drive Growth Ahead of Q3 Earnings

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NOW$138.61 −1.22%

ServiceNow, Inc. (NOW) received an analyst upgrade from BNP Paribas with a new price target of $160. The upgrade highlights expected organic subscription growth of roughly 19% through fiscal year 2026, alongside expanding enterprise security sales and rising artificial intelligence revenues that could reach about 9% of annual recurring revenue by the end of the year.

The company's cybersecurity unit is expected to reach approximately $1.5 billion in annual contract value, representing around 10% of total group business with annual growth of 30% to 40%. Meanwhile, Oppenheimer projects a modest beat for upcoming quarterly metrics despite softer federal sector spending and shifting corporate artificial intelligence budgets. Management also addressed recent takeover rumors, with Chief Executive Officer Amit Zavery explicitly stating that the firm has no intention of acquiring Decagon following more than $11 billion in recent deal activity.

Investors now turn their attention to ServiceNow's third-quarter financial results scheduled for release on October 28. Market consensus anticipates revenue of approximately $4.09 billion and adjusted earnings of around $1.02 per share. Shares of the software enterprise were trading around $138.60, down about 9.5% year-to-date.

Key points

  • BNP Paribas upgraded ServiceNow, Inc. (NOW) to a $160 target, projecting 19% organic subscription growth through FY2026.
  • Artificial intelligence is expected to account for roughly 9% of ServiceNow's annual recurring revenue by year-end.
  • Chief Executive Officer Amit Zavery denied plans to acquire Decagon following over $11 billion in recent acquisitions.
  • ServiceNow will report its third-quarter financial results on October 28, with market estimates targeting $4.09 billion in revenue.

Written by our AI from expert market sources across the web. It can contain mistakes: check the facts before acting on them. Write-ups powered by the free AI API at FreeTheAI.org

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Questions and answers

When does ServiceNow report its Q3 earnings?

ServiceNow is scheduled to report its third-quarter financial results on October 28, with estimated revenue of around $4.09 billion and adjusted earnings of $1.02 per share.

Is ServiceNow acquiring Decagon?

No, ServiceNow Chief Executive Officer Amit Zavery stated that the company has no intention of acquiring Decagon.

What is the new price target for ServiceNow stock?

BNP Paribas raised its price target for ServiceNow to $160, citing strong subscription growth, security sales, and artificial intelligence revenue.