Workflow
Why ServiceNow Stock Tumbled by Almost 8% Today
NOWServiceNow(NOW) The Motley Fool·2025-03-10 22:31

Core Insights - ServiceNow's stock experienced a significant decline of nearly 8% following the announcement of its acquisition of Moveworks, contrasting with the S&P 500's 2.7% drop [1] - The acquisition deal is valued at 2.85billion,whichwillbepaidinamixofcashandstock,althoughthespecificbreakdownwasnotdisclosed[2]−TheintegrationofMoveworks′AItechnologyisexpectedtoenhanceServiceNow′sofferings,aimingtoimproveemployeeengagementandproductivitythroughadvancedAIsolutions[3]AcquisitionDetails−ServiceNow′sacquisitionofMoveworksisaimedatcombiningitsAIcapabilitieswithMoveworks′front−endAIassistantandsearchtechnology[2]−Moveworkshasanotableclientroster,includingcompanieslikeSpotify,Broadcom,andUnilever,indicatingitsstrongmarketpresence[3]MarketReaction−Themarket′snegativeresponsetotheMoveworksacquisitioncontrastswiththepositivereactiontoServiceNow′spreviousacquisitionofQuality360,whichresultedinastockpriceincrease[4]−Concernsamonginvestorsregardingthehighacquisitioncostof2.85 billion, which will be paid in a mix of cash and stock, although the specific breakdown was not disclosed [2] - The integration of Moveworks' AI technology is expected to enhance ServiceNow's offerings, aiming to improve employee engagement and productivity through advanced AI solutions [3] Acquisition Details - ServiceNow's acquisition of Moveworks is aimed at combining its AI capabilities with Moveworks' front-end AI assistant and search technology [2] - Moveworks has a notable client roster, including companies like Spotify, Broadcom, and Unilever, indicating its strong market presence [3] Market Reaction - The market's negative response to the Moveworks acquisition contrasts with the positive reaction to ServiceNow's previous acquisition of Quality 360, which resulted in a stock price increase [4] - Concerns among investors regarding the high acquisition cost of 2.85 billion, which is nearly equivalent to ServiceNow's projected non-GAAP net income for full-year 2024, have contributed to the stock's decline [5] - There is growing apprehension about the potential returns on heavy investments in AI by tech companies amid the current AI market boom [5]