BUZZ - Market Opinion: ServiceNow's strong momentum in artificial intelligence offsets concerns about its slowing growth

October 29 - ** ServiceNow NOW.N reported a 20.5% year-over-year increase in third-quarter revenue (link), slightly surpassing expectations, though adjusted earnings per share missed estimates. The company has raised its full-year subscription revenue and free cash flow margin outlook.

** The software maker's share price dropped nearly 18.4% in pre-market trading to $122.45.

Maintaining confidence

** JPMorgan (maintained "Overweight" rating, target price: $160) expects the gap between current remaining performance obligations (cRPO) and revenue growth to gradually narrow over time, with faster adoption of high-value AI use cases providing potential upside.

** Morgan Stanley ("Overweight", target price: $160) stated that while demand for artificial intelligence is rising, cRPO growth continues to slow, and expects the stock price to remain rangebound until there is stronger growth.

** Jefferies ("Buy", target price: $145) said both revenue and cRPO missed expectations, but promotional initiatives should support long-term growth.

** Barclays ("Overweight", target price: $152) expects short-term pressure despite solid third-quarter results and somewhat weak fourth-quarter guidance; however, notes that the investment thesis remains intact given the consistently better-than-expected earnings performance and strengthening momentum in AI.

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