ServiceNow Inc (NOW) Sees Subscription Sales Accelerating in 2026

ServiceNow Inc (NYSE:NOW) is among the best S&P 500 stocks with highest upside potential. On February 10, Oppenheimer named ServiceNow Inc (NYSE:NOW) among its top US software stocks to watch. While acknowledging that the software industry has lagged behind other IT segments in monetizing AI, Oppenheimer believes companies like ServiceNow have potential to regain momentum. It sees this momentum coming from areas like improved execution and strategic initiatives.

On February 5, Truist cut its price target on ServiceNow to $175 from $240 but kept a Buy rating. The firm said the sector pullback is mostly about long‑term value concerns, not near‑term fundamentals, making AI adoption more important.

Truist noted that companies relying on seat‑based models have been the weakest performers since 2025. It sees AI use cases and a shift away from seat‑based deployments as key strategies for software vendors going forward.

On January 28, ServiceNow released its Q4 2025 results that showed both revenue and earnings surpassed Wall Street expectations. Revenue jumped 20.5% YoY to $3.57 billion, beating the consensus estimate of $3.53 billion. The EPS of $0.92 topped $0.88 expected. The quarter was buoyed by strong growth in the subscription business, which accounts for the bulk of the company’s revenue, with sales in this segment rising 21% YoY to $3.47 billion.

ServiceNow expects growth in its subscription business to accelerate in Q1 2026. It guided subscription sales for the quarter in the range of $3.65 billion to $3.66 billion, suggesting a growth of 21.5% YoY at the midpoint. ServiceNow expects its acquisition of Moveworks to boost subscription revenue by 100 basis points in Q1 as well as full-year 2026.

Headquartered in Santa Clara, California, ServiceNow Inc (NYSE:NOW) offers enterprises the platform they need to streamline their workflow. It provides a cloud-based computing platform enhanced with AI that enables businesses to create and manage automated processes more effectively.

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.