Now's AI Control Tower Adoption Rises: Can It Boost RPO Growth?

ServiceNow's NOW AI Control Tower is poised to capitalize on accelerating enterprise adoption as organizations seek unified AI governance. Positioned as a centralized orchestration platform, it manages AI agents across enterprise environments, addressing complexity from deploying multiple AI solutions. The platform unifies third-party AI applications and NOW's native solutions under a single management framework, establishing it as a vendor-agnostic foundation for AI transformation.

AI Control Tower emerged as a pivotal growth catalyst in ServiceNow's second-quarter performance. Subscription revenues climbed 21.5% year over year to $3.11 billion, while current Remaining Performance Obligations(cRPO) advanced 21.5% to $10.92 billion. The platform exceeded its full-year net new ACV target within just seven months of launch, highlighting robust enterprise appetite. The Zacks Consensus Estimate for third-quarter subscription revenues is pegged at $3.26 billion and the consensus mark for cRPO is pegged at $11.09 billion, implying sustained momentum.

Adoption is broadening across sectors. Standard Chartered will use AI Control Tower to govern agentic AI initiatives, while the North Carolina Department of Transportation is deploying it to ensure compliance as it scales modernization efforts. Cisco and UKG have also adopted the platform, underscoring versatility across industries.

The AI governance market is projected to expand from $227 million in 2024 to $4.8 billion by 2034, according to Grand View Research, while more than 73% of organizations worldwide are either using or piloting AI in core functions as of 2025, per Founders Forum Group. AI Control Tower's early market penetration positions ServiceNow to capture enhanced value from this trend, potentially sustaining RPO growth momentum while expanding addressable market opportunities.

NOW Faces Stiff Competition

ServiceNow’s AI governance position faces growing competition from Salesforce CRM, which is pushing Agentforce and Service Cloud as integrated CRM-to-AI platforms. Salesforce emphasizes embedding AI governance within customer workflows, directly overlapping with ServiceNow’s customer service offerings. However, Salesforce lacks the vendor-agnostic orchestration capabilities that ServiceNow’s AI Control Tower provides.

Microsoft MSFT is another strong competitor, expanding Copilot AI agents and Azure AI governance tools across enterprise environments. Microsoft’s integration with its productivity suite offers scale advantages, but unlike ServiceNow’s natively built orchestration model, MSFT must retrofit governance into its existing systems.

NOW’s Share Price Performance, Valuation and Estimates

ServiceNow shares have declined 15.9% year to date against the broader Zacks Computer & Technology sector’s appreciation of 13.8%.

NOW Stock Performance

NOW stock is trading at a premium, with a forward 12-month Price/Sales of 12.66X compared with the Computer & Technology 6.77X. NOW has a Value Score of F.

Price/Sales (F12M)

The Zacks Consensus Estimate for third-quarter 2025 earnings is currently pegged at $4.22 per share, unchanged over the past 30 days. This indicates a 13.44% increase year over year.

ServiceNow, Inc. Price and Consensus

ServiceNow, Inc. price-consensus-chart | ServiceNow, Inc. Quote

The consensus mark for 2025 earnings is pegged at $16.79 per share, which has increased a quarter over the past 30 days, suggesting 20.62% year-over-year growth.

NOW currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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