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- IBM vs. ServiceNow: Which Technology Stock Is a Better Buy in 2026?
The article compares IBM, which focuses on hybrid cloud and AI, with ServiceNow, which specializes in digital workflow automation. In fiscal 2025, IBM reported revenue of about $67.5 billion (up 7.6%) and net income of about $10.6 billion, while ServiceNow reported about $13.3 billion in revenue (up about 20.9%) and about $1.7 billion in net income. The article cites IBM's free cash flow of about $12.1 billion and debt-to-equity ratio of 2.1x, and ServiceNow's free cash flow of about $4.6 billion, debt-to-equity near 0.2x, and stock-based compensation at roughly 35.9% of operating cash flow. It also outlines risks, including intense competition, integration of acquisitions, and ServiceNow's $7.75 billion purchase of Armis, and notes that IBM carries a significantly lower valuation multiple.
- ServiceNow Stock Just Plunged More Than 20% in a Single Day. Here's What It Did After Its Other Biggest Drops.
ServiceNow shares fell about 25% to near $112 on Thursday after its third-quarter report, on track for their worst day since the company went public in 2012. Subscription revenue rose 21% to $3.99 billion and beat guidance, but the outlook disappointed, with fourth-quarter cRPO growth guided at just 18.5%. Management says much of the slowdown reflects early renewals in the third quarter that pulled deals out of the fourth, and expects fourth-quarter subscription revenue to grow 21.5% in constant currency. The stock has often recovered from past sharp drops, though it kept sliding after the January 2025 and December 2025 declines. At around 23 times expected 2027 earnings, the stock is now much cheaper than the roughly 30 times of the previous day.
- ServiceNow's AI boom faces a big test: Can it reassure Wall Street?
ServiceNow executives reaffirmed the long-term targets set in May: revenue of 30 to 32 billion by 2030, with AI making up 30% of revenue. Seat-based subscriptions are still growing in double digits, and the hybrid model adds consumption-based revenue as usage ramps. The comments respond to investor concern that AI could reduce headcount and weaken seat-based pricing, after Microsoft reportedly offered buyouts to 60,000 employees. Management said that when a seat is reduced, ServiceNow drives 4x the consumption revenue, and customers would cut seats only if AI delivers clearly greater value.
- ServiceNow just can't seem to escape the SaaSpocalypse — even after strong Q3 AI growth
A panel discussed ServiceNow after its results, where free cash flow rose but remaining performance obligations (RPO) came in modestly below expectations, and the company itself forecasts RPO growth to slow in the fourth quarter. CFO Gina Mastrantonio said AI net new business grew 65% year over year, beating expectations, which allowed the company to raise its full-year AI target to 1.7 billion while delivering AI value without a large capex investment. Julia said the market is not yet convinced, citing concerns about AI reducing seat counts, while Mastrantonio said ServiceNow's blended pricing covers both seats and usage. The stock was down 25% that day, which the speakers noted was the fourth straight quarter shares fell after a report.
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ServiceNow's total debt rose to $7.52 billion as of Sept. 30, 2026, from $1.49 billion at the end of 2025, mainly to finance the $7.6 billion Armis acquisition. Third-quarter interest expense climbed to $81 million from $6 million a year earlier, while interest income fell to $69 million from $115 million. A $2.1 billion commercial paper balance at a 4.05% weighted-average rate, with just 62 days remaining, adds refinancing exposure. Offsets include about $6.96 billion in cash and securities, an undrawn $3 billion revolver, $822 million of third-quarter free cash flow, and subscription revenue up 21% to $3.99 billion. The article says recurring revenue and liquidity look sufficient for now, but steady cash generation and integrating acquired businesses will be key, and Salesforce and Microsoft are pushing into ServiceNow's markets.
- ServiceNow shares plunge 24% after earnings revive AI disruption fears
ServiceNow shares fell 24% on Thursday, heading for their worst day ever, after third-quarter results revived fears that AI could disrupt traditional software business models. Revenue rose more than 20% to $4.11 billion, roughly in line with the $4.10 billion estimate, while adjusted EPS of $1.00 fell short of the $1.02 forecast. The company slightly lifted its 2026 subscription revenue outlook to between $15.78 billion and $15.79 billion, and net new AI average contract value jumped 65%. Citi's Tyler Radke said investors wanted quicker payoffs from the newly formed forward-deployed engineering team and that the inflection may not come until next year.
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