Why Bernstein Calls ServiceNow (NOW) a Discount Large-Cap Growth Stock

​ServiceNow, Inc. (NYSE:NOW) is one of the 10 AI Stocks Gaining Attention on Wall Street. On January 30, Bernstein SocGen Group analyst Peter Weed reiterated an Outperform rating on the stock with a $219.00 price target. The firm believes the stock is undervalued and that H2 AI token renewals are an upside catalyst.

Bernstein called ServiceNow a “discount large cap growth” opportunity, stating that it appears relatively cheap as compared to other large-cap software peers with market capitalizations above $50 billion when evaluated on a three-year growth versus price-to-free-cash-flow basis.

Analysts noted that the premium historically assigned to high-growth software has eroded further, leaving NOW trading at lower multiples despite rising forecasts for fiscal 2028 growth.

Bernstein projects a 30 basis point currency-constant subscription revenue beat for NOW as artificial intelligence reaches $1.2 billion in annual contract value in FY26, compared to the company’s $1 billion guidance.

“And note: there is potential conservatism in the company and our model — neither include upside from early consumption-driven renewals. Some customers from the FY24 AI cohort ($200MM+ ACV) could require early incremental AI token renewals in the 2nd half of FY26, based on their reported rapid pace of token consumption.”

ServiceNow, Inc. (NYSE:NOW) provides a platform that integrates workflows, data, and AI to coordinate how work flows across large organizations.

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.