Why ServiceNow (NOW) Still Has an Edge in Agentic AI Despite Investor Concerns

ServiceNow, Inc. (NYSE: NOW) is recognized as one of the rapidly expanding stocks in the agentic AI sector. Despite its growth, some investors remain cautious, seeking confirmation that the company’s AI advancements will translate into sustained financial growth.

Recent Investor Sentiment and Market Expectations

On April 2, 2026, Stifel lowered ServiceNow’s price target from $180 to $135 while retaining a Buy rating. This adjustment was attributed to less optimistic channel feedback and a challenging spending climate within the U.S. federal government.

These factors highlight that a strong position in agentic AI does not fully shield the core business from operational and demand-related concerns.

Financial Performance Highlights

In late January 2026, ServiceNow reported a 21% year-over-year increase in fourth-quarter subscription revenue, reaching $3.47 billion. Total revenue also climbed by 20.5% to $3.57 billion.

Additionally, the company’s current remaining performance obligations—a key indicator for future revenue—rose 25% to $12.85 billion. Notably, the net new annual contract value (ACV) for its Now Assist product more than doubled during the quarter.

Advancements in Agentic AI and Strategic Partnerships

ServiceNow’s focus on agentic AI became more pronounced on January 20, 2026, when it announced an expanded partnership with OpenAI. This collaboration aims to integrate advanced AI capabilities into ServiceNow’s platform, enhancing enterprise workflows with features such as real-time voice agents and autonomous IT and workflow management.

Competitive Advantages Through Scale and Integration

ServiceNow currently facilitates over 80 billion workflows annually, a scale that reinforces its competitive advantage. The company’s strategy involves embedding agentic AI into its well-established enterprise workflow system rather than developing from scratch.

This approach strengthens its position compared to many peers in the AI sector.

ServiceNow’s AI Platform Capabilities

ServiceNow offers a cloud-based AI platform designed to automate and manage workflows across various business functions, including:

  • Information Technology (IT)
  • Customer Service
  • Human Resources

Analyst Perspectives and Investment Considerations

While acknowledging the promise of ServiceNow as an investment, some analysts suggest other AI stocks might present greater growth opportunities combined with lower risks.

Investors interested in undervalued AI companies that could also benefit from trade policies and domestic manufacturing trends are encouraged to review additional research reports on emerging AI stocks.

Key Takeaways

  • ServiceNow shows strong year-over-year revenue growth and increasing future revenue indicators.
  • Its partnership with OpenAI enhances its agentic AI capabilities within enterprise workflows.
  • Operating over 80 billion annual workflows demonstrates significant scale and competitive strength.
  • Despite strengths, some investors remain cautious due to operational and demand concerns.
  • Analysts recommend considering other AI stocks for broader growth and risk profiles.

No disclosures were reported in relation to this article.