Here's Why ServiceNow (NOW) Was Among Piper Sandler's Top Picks For 2026

ServiceNow, Inc. (NYSE:NOW) is one of the 15 software stocks with the highest upside potential. According to Piper Sandler’s January 5, 2026, outlook for Security and Infrastructure Software stocks, the stock is among the firm’s top 5 picks for 2026. Analyst Rob Owens and his team said that we remain cautiously optimistic for 2026, as many companies are well-positioned to emerge as long-term GenAI winners and are at attractive valuations.

The team of analysts highlighted that the primary reason behind the drop in valuation is growing investor concern over the sustainability of growth. This is driven by potential headwinds from seat-count trends affecting the business model, slower-than-expected AI rollouts, and challenges in key verticals, such as the Fed, that appear to be structural rather than cyclical.

Rob Owens and his team commented:

”Due to recent M&A as well as speculation regarding GenAI disruption, NOW has slipped to ~29x EV / NTM FCF, close to the lowest valuation we have seen for the company over the last five years (which was ~25x at the end of ’22).”

However, on January 5, the financial services firm lowered its price target on the shares from $230 to $200 while reiterating a Buy rating. The revised price target offers a further 47.6% upside from the current levels.

ServiceNow, Inc. (NYSE:NOW) operates as a provider of cloud-based solutions for digital workflows worldwide. It operates an AI platform known as the Now platform. The company serves financial services, manufacturing, technology,  healthcare & life science, Public Sector, Telecom sectors, and other markets.

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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Disclosure: None. This article is originally published at Insider Monkey.