ServiceNow (NOW) shares have fallen 25.4% in the past year, underperforming the Computer and Technology sector’s 25.4% growth and the Computers IT Services industry’s 19.2% decline. The company’s fourth-quarter 2025 guidance reflects tightening budgets of U.S. federal agencies, impacting subscription revenues. NOW raised its 2025 subscription revenue guidance to $12.835 billion-$12.845 billion, slower than 2024’s 23% growth rate.
ServiceNow’s AI-powered portfolio, with growing workflow adoption, is expected to boost its prospects for 2026. The company is gaining traction with its AI Platform, with AI Control Tower deal volume quadrupling in Q3 2025. The recent acquisition of Veza strengthens NOW’s security and risk portfolios, enhancing governance capabilities and reducing enterprise risks.
ServiceNow’s expanding partner base includes NVIDIA, Microsoft, Figma, and Genesys. Collaborations with NVIDIA and Microsoft are enhancing AI capabilities in workflows, while the Figma partnership is bridging design intent and enterprise execution. ServiceNow’s AI products are expected to surpass $0.5 billion in ACV in 2025, on track to achieve $1 billion in 2026.
Earnings estimates for ServiceNow show mixed trends, with a downward revision for Q4 2025 but positive trends for 2025 and 2026. NOW’s stock is currently overvalued, trading at a premium compared to the sector. Technically, shares are trading below the 50-day and 200-day moving averages, indicating a bearish trend.
Despite challenges, NOW’s expanding portfolio, growing workflow adoption, and partner base are expected to drive top-line growth in 2026. The company currently has a Zacks Rank #3 (Hold), suggesting investors wait for a better entry point. In the world of quantum computing, artificial intelligence convergence presents wealth-building opportunities, with potential for significant gains for early investors. Access the report to learn about stocks leading the quantum computing race.
Read more at Nasdaq: Can Workflow Adoption Drive NOW Stock in 2026 Post 25% Drop?