From Nasdaq: 2024-11-14 11:08:00

ServiceNow (NOW) is enhancing its platform with Generative AI (GenAI) and governance innovations to promote responsible AI practices. The company is adding over 150 GenAI innovations, including new Now Assist capabilities with AI Governance for secure AI practices. NOW’s partner base, including Five9, Visa, Microsoft, NVIDIA, and more, is strengthening its AI capabilities.

ServiceNow is expanding its GenAI capabilities to drive top-line growth. A recent expanded partnership with Five9 aims to deliver an AI-powered solution for unified employee and customer experiences. NOW’s shares have appreciated by 48% year-to-date, outperforming the Computer & Technology sector and Computers – IT Services industry.

ServiceNow raises its subscription revenue guidance for 2024, expecting revenues of $10.655-$10.66 billion. The company anticipates a 23% rise in subscription revenues from 2023 actuals on a GAAP basis. NOW’s strong liquidity position with $5.295 billion in cash as of Sept. 30, 2024, and a free cash flow margin of 31% make its stock attractive.

ServiceNow is leveraging AI and machine learning to enhance its solutions. The GenAI capabilities are expected to address a market worth $275 billion by 2026. The Xanadu update offers AI-powered industry solutions across various domains and aims to improve customer agility, productivity, and employee experiences. NOW plans to integrate Agentic AI to enhance productivity further.

ServiceNow stock, while not cheap, justifies its premium valuation with strong growth prospects. The company’s GenAI portfolio and partner base are expected to drive subscription revenues, making it appealing to growth-oriented investors. ServiceNow currently holds a Zacks Rank #2 (Buy), indicating a favorable outlook for the stock.



Read more at Nasdaq: ServiceNow Expands Generative AI Offerings: Is the Stock a Buy?