ServiceNow (NOW) in Focus as Bernstein Calls It the Cheapest Large-Cap Software Name

Core Viewpoint - ServiceNow, Inc. is considered one of the most undervalued large-cap software stocks in the market, with Bernstein SocGen reiterating an "Outperform" rating and a price target of $1,093.00, citing its valuation as overly discounted compared to fundamentals and peers [1]. Valuation and Comparison - ServiceNow is currently trading at a lower valuation than Adobe, which has been significantly impacted by AI fears, and even below Salesforce, which has a weaker reputation [2][3]. - The stock's Price to 3-year-out Free Cash Flow (minus Stock-Based Compensation) relative to its growth rate is now below that of the most bearish AI-narrative impacted large-cap application software peers [2]. Growth Outlook - There are no signs of organic growth downgrades on the horizon, contrasting with the mid-2022 situation where a bearish macro change led to a guide down [3]. - Management continues to indicate accelerating demand, supported by recent channel checks, with current signals for 2026 reflecting 'normal' IT demand [3]. Market Context - While potential macro shocks could impact IT, the cost efficiencies sought in a down market may still bolster demand for ServiceNow's offerings [4]. - ServiceNow provides a platform that integrates workflows, data, and AI to enhance operational efficiency across large organizations [4].