ServiceNow (NOW) Falls 9.94% as AI Threatens SaaS Sector

We recently published 10 Stock Titans With Massive Losses. ServiceNow Inc. (NYSE:NOW) was one of the best performers on Wednesday.

ServiceNow dropped for a third straight day on Thursday, shedding 9.94 percent to close at $116.73 apiece as investors turned cautious over the threats of AI for the broader software-as-a-service (SaaS) industry, overshadowing the company’s strong earnings performance in the fourth quarter of last year.

ServiceNow Inc. (NYSE:NOW) declined alongside its counterparts, namely SAP, Salesforce, Adobe, and Datadog, among others, after JPMorgan raised concerns that advances in AI capabilities could challenge SaaS companies selling subscription-based products.

It said that the malaise in software sentiment persists, coupled with a seemingly paradoxical and vicious cycle of depressed valuations, with maintained, if not rising, investor expectations.

Meanwhile, ServiceNow Inc. (NYSE:NOW) reported higher earnings in the fourth quarter of the year, with net income jumping by 4 percent to $401 million from $384 million in the same period a year earlier, bringing its full-year net profit up by 23 percent to $1.75 billion from $1.42 billion year-on-year.

Total revenues increased by 21 percent to $3.57 billion from $2.96 billion, bringing its full-year tally up by 21 percent to $13.3 billion from $10.98 billion year-on-year, and beating earlier guidance.

For the first quarter, ServiceNow Inc. (NYSE:NOW) is gunning for subscription revenues between $3.650 billion and $3.655 billion, or an implied growth of 21.5 percent year-on-year.

For the full year, subscription revenues are projected to hit $15.53 billion to $15.57 billion, or a 20.5 percent to 21 percent increase from 2025 levels.

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