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UBS: ServiceNow’s (NOW) Core Business Solid, AI Adoption Disappoints Slightly

Core Insights - ServiceNow, Inc. is being closely monitored by analysts as an AI stock, with UBS lowering its price target to $1,075.00 from $1,100.00 while maintaining a Buy rating ahead of the company's third-quarter earnings report [1] - UBS's checks with partners and customers indicate solid core business performance, suggesting a normal earnings beat for the third quarter [1][3] - Feedback on AI adoption has been somewhat disappointing, consistent with trends observed in other Software-as-a-Service (SaaS) companies [2][3] Business Performance - The core business checks for ServiceNow were reported as fine/solid, indicating positive momentum leading into the earnings report [3] - The stock is currently trading at 36 times the calendar year 2026 earnings, with an expected growth rate of approximately 20%, suggesting limited near-term downside risk [4] Market Sentiment - The sentiment surrounding SaaS applications is described as cautious, potentially the worst in years, which may impact investor outlook [4] - While ServiceNow shows potential as an investment, there are other AI stocks perceived to offer greater upside potential with less downside risk [5]