Wall Street May Be Sleeping on This AI Growth Story, The Stock Has 97% Upside

1 hour ago 4

Vandita Jadeja

Wed, August 12, 2026 astatine 10:30 AM CDT 5 min read

Quick Read

NOW is down 17% successful 2026 yet delivered 24% gross maturation and ninefold agentic deployment expansion, pointing to 97% upside successful our model.
ServiceNow's 24% subscription maturation runs 10 points up of Workday (WDAY) astatine a little growth-adjusted valuation and astir doubles Salesforce's (CRM) top-line rate.
CEO Bill McDermott called Q2 'the instauration for a re-rating,' with AI already tracking up of its 30% of ACV people acceptable for 2030.
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ServiceNow (NYSE:NOW) has been punished successful 2026 contempt printing 1 of the strongest quarters successful endeavor software. The banal closed astatine $127.54 connected August 11, 2026, disconnected 16.74% twelvemonth to day and 25.53% implicit the trailing year.

A close-up presumption of a acheronian grey microchip with the achromatic letters 'AI' connected its surface, centrally positioned connected a densely populated physics circuit board. The committee is illuminated with beardown bluish airy connected the near and magenta airy connected the right, casting a colorful glow implicit the galore tiny physics components, solder points, and etched pathways. Text labels specified arsenic R29, C12, U71, R45, and C26 are disposable among the components.

Our 24/7 Wall St. terms people for ServiceNow is $251.28 implicit the adjacent 12 months, implying 97.02% upside. Our proposal is buy, with a assurance level of 90%.

24/7 Wall St. Price Target Summary

The Setup Behind a 25% Drawdown and a 24% Growth Quarter

ServiceNow trades 28% beneath its 52-week precocious of $194.73, yet Q2 FY26 gross reached $3.987 billion, up 24.01% twelvemonth implicit year, with non-GAAP EPS of $0.90 beating statement by 5.09%.

Subscription gross climbed 24.5% to $3.877 billion, and cRPO reached $13.20 billion, up 21% YoY. ServiceNow AI ACV crossed $1 billion, and agentic deployments accrued ninefold implicit 9 months. Shares person gained 18.41% implicit the past period and 7.96% implicit the past week.

Why Bulls See a Breakout Ahead

CEO Bill McDermott framed the setup connected the Q2 call: "This is the instauration for a re-rating of ServiceNow." CFO Gina Mastantuono said the institution is "already tracking up of our people for AI to scope 30% of ACV by 2030".

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Deals with 5+ AI products grew 5.5x YoY, and Level 1 AI specialists are closing 80% to 85% of work requests with nary quality interaction.

Analyst positioning skews aggressive: 34 Buy and 10 Strong Buy ratings versus conscionable 1 Sell. In a bull scenario, our exemplary points to $275.49, oregon 116% upside.

What Could Go Wrong

GAAP operating income fell 54.75% and GAAP subscription gross borderline dropped to 73.5% from 80%, with FX headwinds of astir $35 cardinal pressuring Q3 cRPO.

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