Why ServiceNow Stock Edged Past the Market Today

Is the Great Software Stock Rout over?

It’s too soon to say, but some titles in the category enjoyed a bit of a comeback Monday. One was ServiceNow (NOW +1.18%), a specialist in optimizing IT workflows in businesses. Investors traded the company up by more than 1.1%, which was just good enough to beat the S&P 500 index’s 1% bump. An analyst upgrade had more than a little to do with that.

From hold to buy

That upgrade was made by BNP Paribas Exane’s Stefan Slowinski, who currently rates ServiceNow stock outperform, rather than his previous neutral. He also thinks it could hit $140 per share; his previous level was $120.

Image source: Getty Images.

According to reports, Slowinski believes ServiceNow has the qualities to succeed in the beaten-down software space. Specifically, the analyst believes a company needs to show stabilization in its core business, increased monetization of its artificial intelligence (AI) functionalities, and decent profit margins.

Slowinski feels that the company is still in front of encouraging growth opportunities, to the point where it could post a roughly 20% increase in subscription revenue this year over last.

ServiceNow Stock Quote

Today’s Change

(1.18%) $1.34

Current Price

$114.96

AI for the win

ServiceNow is an assertive and enthusiastic adopter of AI, and as such, I think this gives the company an edge. Its latest offerings lean heavily into active AI assistance, and this dovetails nicely with the needs of modern enterprises. ServiceNow stock was unfairly punished in many ways recently, and it’s deserving of at least a new look by investors.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ServiceNow. The Motley Fool has a disclosure policy.

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