Disappointed investors seek tech stocks after the Magnificent Seven underperform. Concerns about an AI bubble make it hard to identify profitable tech companies, but one pick-and-shovel stock in the AI market may provide a solution. ServiceNow (NYSE: NOW) offers cloud-based SaaS platforms with AI and workflow automation, supporting a bullish 2026 despite a 32% drop in shares.

ServiceNow operates in the growing enterprise software market, forecasted to reach over $517 billion by 2030 with a CAGR of 12.1%. The global intelligent automation market is also expanding, estimated to grow to $44.74 billion by 2030 at a CAGR of 22.6%. ServiceNow’s Now Platform integrates AI, leading to strong revenue growth and a 98% customer retention rate.

ServiceNow has seen a significant increase in revenue, with a 127% growth in net income from 2019 to the end of FY 2024. Despite the stock’s underperformance in 2025, analysts predict significant upside potential for ServiceNow in 2026 due to its strong fundamentals and impressive earnings track record. The company has met or beat earnings expectations for 30 consecutive quarters.

Wall Street remains bullish on ServiceNow, with 35 Buy ratings out of 42 analysts. The stock has a consensus Moderate Buy rating, with an average 12-month price target of $216, suggesting over 57% potential upside. Current short interest is low at 1.65%, while institutional ownership is high at over 87%. ServiceNow ranks 83rd out of 633 technology stocks evaluated by MarketBeat.

Read more at Nasdaq: This Under-the-Radar AI Stock Is Poised for 50% Upside