ServiceNow (NOW) shares fell 27% after its third-quarter report, as renewed fears that AI could disrupt its business weighed on the stock, which is now down 31% year to date. Revenue grew 20.5% to $4.11 billion and adjusted EPS rose 5% to $1, while subscription revenue climbed 21% to $3.99 billion, though the earnings beat was smaller than usual. AI annual contract value rose 65% and the year-end target was raised to $1.7 billion from $1.5 billion, while RPO grew 22.5% to $29.7 billion and the company expanded its partnership with OpenAI. For the fourth quarter, ServiceNow forecast subscription revenue growth of 22.5% to 23%, and it raised full-year subscription revenue guidance to $15.78–$15.79 billion. The author views the drop as an overreaction, noting the stock trades at about 6 times forward sales based on 2027 estimates and a forward P/E just above 22, and sees the AI disruption risk as low for a SaaS company still growing subscription revenue 20% or more.
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| Market | US stocks |
|---|---|
| Sector | Information Technology |
| Industry | Semiconductors |
| Market cap | $5.1T |
| Close on 10/30/2026 | 204.81 |
| Change that session | -4.14% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
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