Why ServiceNow (NOW) Shares Are Sliding Today

What Happened?

Shares of enterprise workflow automation company ServiceNow (NYSE:NOW) fell 7.4% in the afternoon session after fears of disruption from artificial intelligence spooked investors, leading to a broad-based sell-off. The market witnessed a "basket-style reaction," a term for when investors reduce exposure to an entire segment without differentiating between individual company business models. The negative sentiment was widespread, pulling down all of the Magnificent Seven stocks and sending the S&P 500 Information Technology Sector down nearly 3%.

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What Is The Market Telling Us

ServiceNow’s shares are somewhat volatile and have had 10 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 5 days ago when the stock dropped 11.4% on the news that the company reported fourth quarter earnings: Current RPO (remaining performance obligations) was just in line with expectations, and it only narrowly topped analysts' revenue expectations. Also, while adjusted operating profit in the quarter beat and subscription revenue guidance was slightly ahead, the overall results were not convincingly ahead of Wall Street's estimates enough to ease fears that AI may be a net negative for the company. Looking forward, ServiceNow's guidance was anchored by expectations of continued AI adoption, product integration, and operational efficiencies. Management highlighted the company's evolving hybrid pricing model and the rapid expansion of its AI control tower and security capabilities as central to sustaining growth.

ServiceNow is down 25.8% since the beginning of the year, and at $109.35 per share, it is trading 47.7% below its 52-week high of $208.94 from July 2025. Investors who bought $1,000 worth of ServiceNow’s shares 5 years ago would now be looking at an investment worth $948.15.

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