Why AI Stock ServiceNow Sank by Almost 5% on Thursday

Core Viewpoint - ServiceNow's stock experienced a significant decline due to a price target reduction by an analyst, amidst a generally negative market sentiment [1][2]. Group 1: Analyst Insights - Kash Rangan from Goldman Sachs lowered his fair value assessment for ServiceNow to $1,050 per share, a decrease of$150 from the previous target, while still maintaining a buy recommendation [2]. - Rangan's adjustment is based on expectations of potential impacts on ServiceNow's fundamentals in the second quarter and throughout the year, particularly due to its substantial business with public-sector clients affected by government downsizing [3]. Group 2: Market Reaction and Valuation - The stock price of ServiceNow fell by over 5% in a single day, reflecting aggressive selling by investors, which Rangan suggests may present a buying opportunity given the current valuations [1][4]. - Despite the recent downturn, Rangan remains optimistic about ServiceNow's efforts to integrate artificial intelligence functionalities into its offerings, which could enhance its market position [4]. Group 3: Upcoming Developments - ServiceNow is scheduled to report its first-quarter results on April 23, which will provide further insights into the company's performance and validate the analyst's outlook [5].