ServiceNow (NYSE:NOW) Shares Gap Up - Here's Why

Key Points

• ServiceNow shares gapped up premarket, opening at $103.60 after closing at $99.28, amid heavy trading volume of nearly 4.9 million shares.
• Investor sentiment improved after Guggenheim upgraded the stock to Buy, saying ServiceNow looks undervalued following recent sector selloffs. Other reports echoed that the pullback may have created an attractive entry point.
• AI-related and enterprise security initiatives are also supporting the story, including a joint effort with Accenture to modernize cyber risk management using agentic AI, though analysts still warn that AI disruption remains a risk for enterprise software valuations.

ServiceNow, Inc. (NYSE:NOW - Get Free Report) gapped up before the market opened on Wednesday . The stock had previously closed at $99.28, but opened at $103.60. ServiceNow shares last traded at $103.5280, with a volume of 4,921,560 shares traded.

Trending Headlines about ServiceNow

Here are the key news stories impacting ServiceNow this week:

• Positive Sentiment: Guggenheim upgraded ServiceNow to Buy and said the stock looks undervalued after heavy sector selloffs, which is boosting investor sentiment. ServiceNow jumps 4% as Guggenheim flips from Neutral to Buy
• Positive Sentiment: Multiple reports echoed the upgrade, saying ServiceNow and Salesforce now look like attractive entry points after recent weakness, reinforcing the idea that the selloff may have gone too far. ServiceNow and Salesforce shares now look like buys, as ‘Armageddon’ fears are too extreme, analyst says
• Positive Sentiment: ServiceNow also has recent AI-related and enterprise security momentum, including a joint initiative with Accenture to modernize risk management and cyber services using agentic AI. ServiceNow, Accenture unveil AI-driven cyber risk management offering
• Neutral Sentiment: The stock is being watched ahead of upcoming Q2 earnings, where analysts expect results to show continued pressure on growth and earnings trends. ServiceNow's Q2 2026 Earnings: What to Expect
• Negative Sentiment: Investors still face a real AI disruption risk, with analysts warning that enterprise software valuations remain under pressure as AI reshapes the industry. ServiceNow stock jumps after Guggenheim upgrade despite AI concerns

Analyst Upgrades and Downgrades

Several research analysts have recently issued reports on the stock. Morgan Stanley lowered their target price on shares of ServiceNow from $210.00 to $180.00 and set an "overweight" rating for the company in a report on Thursday, April 23rd. Evercore upped their price objective on shares of ServiceNow from $140.00 to $150.00 and gave the company an "outperform" rating in a research note on Tuesday, May 5th. DA Davidson reiterated a "buy" rating and set a $190.00 target price on shares of ServiceNow in a research report on Tuesday, May 5th. Wells Fargo & Company reduced their target price on ServiceNow from $185.00 to $160.00 and set an "overweight" rating for the company in a report on Thursday, April 23rd. Finally, BNP Paribas Exane raised ServiceNow from a "neutral" rating to an "outperform" rating and set a $140.00 target price for the company in a research report on Monday, March 16th. One research analyst has rated the stock with a Strong Buy rating, thirty-six have given a Buy rating, four have given a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat, ServiceNow has an average rating of "Moderate Buy" and a consensus price target of $141.68.

ServiceNow Stock Performance

The company has a current ratio of 0.84, a quick ratio of 0.84 and a debt-to-equity ratio of 0.13. The stock has a market cap of $108.70 billion, a price-to-earnings ratio of 62.74, a PEG ratio of 1.66 and a beta of 0.94. The stock's 50 day moving average is $100.23 and its two-hundred day moving average is $113.88.

ServiceNow (NYSE:NOW - Get Free Report) last posted its quarterly earnings data on Wednesday, April 22nd. The information technology services provider reported $0.97 EPS for the quarter, meeting analysts' consensus estimates of $0.97. ServiceNow had a net margin of 12.59% and a return on equity of 18.16%. The company had revenue of $3.77 billion for the quarter, compared to analyst estimates of $3.75 billion. During the same period in the previous year, the business posted $0.81 earnings per share. ServiceNow's quarterly revenue was up 22.1% on a year-over-year basis. Analysts anticipate that ServiceNow, Inc. will post 2.34 earnings per share for the current fiscal year.

Insider Activity

In other ServiceNow news, insider Jacqueline P. Canney sold 8,927 shares of ServiceNow stock in a transaction that occurred on Friday, April 24th. The stock was sold at an average price of $89.60, for a total value of $799,859.20. Following the sale, the insider owned 29,531 shares of the company's stock, valued at approximately $2,645,977.60. The trade was a 23.21% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, Director Anita M. Sands sold 16,445 shares of the stock in a transaction that occurred on Thursday, May 14th. The stock was sold at an average price of $90.14, for a total value of $1,482,352.30. Following the transaction, the director directly owned 30,090 shares of the company's stock, valued at approximately $2,712,312.60. This trade represents a 35.34% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold 28,071 shares of company stock worth $2,529,956 in the last ninety days. 0.34% of the stock is currently owned by insiders.

Institutional Investors Weigh In On ServiceNow

Several institutional investors have recently made changes to their positions in NOW. Vanguard Group Inc. increased its holdings in ServiceNow by 404.5% in the fourth quarter. Vanguard Group Inc. now owns 101,963,384 shares of the information technology services provider's stock valued at $15,619,771,000 after buying an additional 81,752,460 shares in the last quarter. State Street Corp increased its stake in ServiceNow by 406.6% in the 4th quarter. State Street Corp now owns 47,896,597 shares of the information technology services provider's stock valued at $7,337,280,000 after purchasing an additional 38,441,898 shares in the last quarter. Price T Rowe Associates Inc. MD raised its holdings in ServiceNow by 371.0% during the fourth quarter. Price T Rowe Associates Inc. MD now owns 32,395,663 shares of the information technology services provider's stock worth $4,962,692,000 after purchasing an additional 25,517,218 shares during the last quarter. Geode Capital Management LLC raised its holdings in ServiceNow by 404.8% during the fourth quarter. Geode Capital Management LLC now owns 23,512,428 shares of the information technology services provider's stock worth $3,591,425,000 after purchasing an additional 18,854,775 shares during the last quarter. Finally, Morgan Stanley boosted its position in ServiceNow by 335.6% during the fourth quarter. Morgan Stanley now owns 22,733,483 shares of the information technology services provider's stock worth $3,482,543,000 after purchasing an additional 17,514,679 shares in the last quarter. 87.18% of the stock is currently owned by hedge funds and other institutional investors.

ServiceNow Company Profile

ServiceNow NYSE: NOW is a cloud computing company that builds enterprise software to manage digital workflows and automate business processes. Its offerings are designed to replace manual work and legacy systems with cloud-based, service-oriented applications that support IT operations, customer service, human resources, security response and other enterprise functions.

The company's flagship product family is the Now Platform, a suite of subscription software and platform services that includes IT Service Management (ITSM), IT Operations Management (ITOM), IT Business Management (ITBM), Customer Service Management (CSM), HR Service Delivery, Security Operations and Asset Management.

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