NOW stock is down 33% as ServiceNow reports Q2 results
NOW stock is down roughly 33% year to date as ServiceNow reports second-quarter earnings after the close. Investors are weighing AI-related software-sector jitters against still-bullish Wall Street forecasts calling for about $3.93 billion in revenue and $0.86 in adjusted earnings per share.
Key Takeaways
- NOW stock has fallen about 33.4% this year, underperforming the broader software sector ETF IGV.
- Analysts expect Q2 revenue to rise 22% to $3.93 billion and adjusted earnings to climb 5% to $0.86 a share.
- ServiceNow raised its 2026 AI revenue target to $1.5 billion and closed a $7.8 billion Armis cybersecurity deal.
- Wall Street stays mostly bullish, while Stocktwits retail sentiment remained bearish into the print.
Shares of ServiceNow edged about 0.2% higher in Wednesday premarket trading ahead of results due after the closing bell, according to a Yahoo Finance report originally published via Stocktwits. That modest bounce came even as broader markets sold off, underscoring how closely traders are watching this print for net worth and wealth portfolios heavy in software.
Why has NOW stock fallen so sharply this year?
NOW stock has seesawed since March, reflecting mixed investor sentiment. It is still down 33.4% year to date, while the iShares Expanded Tech-Software Sector ETF (IGV) has declined 14.4% over the same stretch.
A Seeking Alpha preview framed the backdrop as part of a wider AI shakeout in markets, arguing ServiceNow has nonetheless outperformed the software sector over the past month. If results meet or beat guidance, that analysis said NOW could help lift IGV into a stronger next leg.
What are Wall Street expectations for ServiceNow Q2?
Consensus calls for second-quarter revenue of $3.93 billion, up 22%, and adjusted income of $0.86 per share, up 5%, based on Koyfin data cited by Yahoo Finance. Those figures matter because they set the bar for whether the report can inject fresh life into the beaten-down shares.
Analysts remain constructive overall: 44 of 49 rate the stock a Buy or better, with an average price target of $140.14 — about 37% implied upside from Tuesday's close. Morgan Stanley also started coverage this week at Overweight with a $180 target, citing ServiceNow's competitive moat.
Can ServiceNow's AI push offset disruption worries?
Management has doubled down on AI while expanding cybersecurity. The company completed its $7.8 billion acquisition of Armis, raised its 2026 AI revenue target to $1.5 billion, and reiterated a goal of more than $30 billion in annual subscription revenue by 2030.
It has also expanded enterprise AI partnerships with firms such as Wipro and Accenture to help customers deploy agentic AI across IT, HR, procurement, and security workflows. On Seeking Alpha, key watch items include current remaining performance obligations (cRPO) growth, subscription revenue, the trajectory of AI-driven Now Assist contract value, and margins.
Valuation in that bullish thesis was described as about 25 times fiscal 2026 non-GAAP earnings, with projected earnings growth in the high teens to low twenties. Still, Stocktwits sentiment stayed bearish into results, a reminder that retail traders have not fully bought the rebound story.
For investors tracking enterprise software names, Wednesday's after-hours numbers will test whether NOW stock can turn AI anxiety into proof of durable demand — or whether caution remains the default setting.