UBS: ServiceNow's (NOW) Core Business Solid, AI Adoption Disappoints Slightly

ServiceNow, Inc. (NYSE:NOW) is one of the AI Stocks Analysts Are Watching Closely. On October 14, UBS lowered its price target on the stock to $1,075.00 from $1,100.00 while maintaining a Buy rating. The rating comes ahead of the company’s third-quarter earnings report.

UBS conducted partner and customer checks to assess ServiceNow’s momentum in 3Q. The firm noted how checks reveal fine/ solid core business performance, which is why it is poised for a normal beat.

One drawback is that feedback on AI adoption has been a little bit disappointing, which aligns with the feedback it has been receiving on other Software-as-a-Service (SaaS) companies.

“Ahead of ServiceNow’s 3Q25 print on Oct 29th, we caught up with a handful of ServiceNow partners and customers to assess how ServiceNow’s momentum tracked in 3Q. Bottom line, the checks on the core business were fine/solid, pointing in our view to a normal beat, but the feedback on AI adoption was somewhat disappointing, in keeping with what we’re hearing in checks on other SaaS firms.

With SaaS/apps sentiment already cautious – frankly, perhaps the worst in years – and the stock trading at just 36x CY26 for ~20% growth, near-term downside could be limited.”

ServiceNow, Inc. (NYSE:NOW) is a technology company that offers a cloud-based software platform for automating business workflows within an enterprise.

While we acknowledge the potential of NOW  as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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