ServiceNow: AI Takes Center Stage at Analyst Day

ServiceNow highlighted a variety of new solutions at its analyst day that broadly focused on product innovation. We think important new product announcements and the introduction of proprietary generative artificial intelligence models further support the company’s wide moat. The firm also announced its first-ever stock buyback, for $1.5 billion, which we think should please investors. Unsurprisingly, ServiceNow lowered its subscription revenue target for 2026 to $15-plus billion, from $16 billion previously, to account for about $900 million in unexpected currency headwinds experienced in 2022. This is largely in line with our model, and we therefore maintain our fair value estimate of $600 per share. The stock looks attractive and remains one of our top picks.