NOW's New Zurich Release to Boost AI Adoption: A Sign of More Upside?

ServiceNow’s NOW latest Zurich platform promises rapid AI adoption through the combination of multi-agentic AI development, enterprise-grade security and autonomous workflows. NOW’s workflows are gaining traction. In the second quarter of 2025, technology workflows won 40 deals worth over $1 million, including four over $5 million. ITSM, ITOM, ITAM, security and risk were all in at least 15 of the top 20 deals. CRM and industry workflows were in 17 of NOW’s top 20 deals, with 17 of those deals over $1 million. Core business workflows were in 16 of the top 20 deals, with seven deals over $1 million.

ServiceNow is gaining a footprint among enterprises with Workflow Data Fabric included in 17 of the company’s top 20 largest deals. Through Workflow Data Fabric, ServiceNow offers a combination of data, analytics and AI that, along with agentic AI, helps enterprises get faster and smarter outcomes. CRM workflow offers a massive growth opportunity for ServiceNow, driven by sales and order management solutions and acquisitions of Logik.ai, which helped NOW close 9 CPQ deals in June alone.

The Zurich release offers a Build Agent that brings vibe coding to enterprise scale. Vibe coding allows employees to create production-ready applications from natural language prompts. Developer Sandbox helps developers build better applications by providing isolated environments for building and testing. It supports collaboration by multiple teams, as well as building and testing without any conflict. ServiceNow Vault Console centralizes discovery, classification, and protection of sensitive data across workflows, while Machine Identity Console manages and secures API and bot identities.

Growing workflow traction has been driving subscription revenues. ServiceNow raised subscription revenue guidance for 2025, which is now expected between $12.775 billion and $12.795 billion, suggesting 19.5-20% on a non-GAAP constant currency (cc) basis. For third-quarter 2025, subscription revenues are projected between $3.26 billion and $3.265 billion, suggesting year-over-year growth of 19.5% at cc.

Tough Competition Hurts NOW’s Prospects

NOW faces stiff competition from the likes of Pegasystems PEGA and Salesforce CRM. 

Pegasystems is benefiting from strong demand for its GenAI Blueprint solution, an agent that utilizes AI to combine the company’s best practices, as well as knowledge from clients and partners, to design enterprise workflow applications. ACV growth is expected to remain robust, thanks to ongoing digital transformation, strong adoption of the Pega GenAI Blueprint and case-based pricing approach. Expanding portfolio with new set-to-be-launched solutions, including Pega Agentic Process Fabric and Infinity, is a key catalyst.

Salesforce is making its Data Cloud platform a key part of its growth strategy. The Data Cloud platform brings together customer data from multiple sources and makes it usable across Salesforce products. Salesforce is also integrating the Data Cloud platform with its other tools like Agentforce, Tableau and Slack. These connections make it easier for enterprises to activate their data and apply AI across operations. This integration could drive higher contract values and deeper customer relationships for CRM.

NOW’s Share Price Performance, Valuation & Estimates

NOW shares have dropped 9.7% year to date, underperforming the broader Zacks Computer and Technology sector’s return of 19.8%.

NOW Stock’s Performance

ServiceNow stock is overvalued, with a forward 12-month price/sales of 13.31X compared with the broader sector’s 6.94X. NOW has a Value Score of F.

NOW Valuation

The Zacks Consensus Estimate for third-quarter 2025 earnings is pegged at $4.22 per share, unchanged over the past 30 days, suggesting 13.4% year-over-year growth.
 

ServiceNow, Inc. Price and Consensus

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

ServiceNow 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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