NOW: AI Partnerships And Stock Split Will Drive Long-Term Upside

Analysts have raised their price target on ServiceNow from approximately $1,243 to $1,332, reflecting slightly stronger long term margin expectations that more than offset a modestly lower revenue growth outlook and a small contraction in anticipated future valuation multiples.

What's in the News

• Shareholders approved a 5 for 1 stock split, with the amended and restated certificate of incorporation to take effect on December 17, 2025, increasing the number of authorized common shares (Special Meeting and charter amendment).
• ServiceNow announced new and forthcoming integrations with Microsoft, including Microsoft Agent 365, to orchestrate and govern agentic AI across Microsoft 365 and the ServiceNow AI Platform, aiming to standardize enterprise AI control and visibility (Microsoft integration announcement).
• The company expanded its long term AI partnership with NVIDIA, introducing Apriel 2.0, a smaller, multimodal open model designed to power autonomous agents and integrate with NVIDIA AI Factory reference designs for data center operations (NVIDIA GTC announcement).
• ServiceNow launched AI Experience, a unified conversational front door for enterprise AI that layers voice agents, web agents, and AI Data Explorer on top of Now Assist, governed centrally via AI Control Tower (AI Experience product launch).
• ServiceNow and FedEx Dataworks entered an expanded strategic alliance to combine FedEx supply chain data with the ServiceNow AI Platform, initially targeting real time intelligence in Source to Pay Operations and longer term end to end AI native supply chain workflows (FedEx Dataworks collaboration).

Valuation Changes

• The fair value estimate has risen slightly from approximately $1,243 to $1,332, reflecting modestly higher long term margin expectations.
• The discount rate has increased moderately from about 7.6 percent to 8.5 percent, indicating a somewhat higher required return on equity.
• The revenue growth assumption has edged down slightly from roughly 22.8 percent to 21.7 percent, reflecting a more measured long term growth outlook.
• The net profit margin forecast has improved marginally from about 20.8 percent to 21.1 percent, supporting a higher earnings trajectory over time.
• The future P/E multiple has decreased slightly from around 76.9x to 74.9x, implying a modestly lower valuation applied to forward earnings.