Bank Of America Hikes Price Target On ServiceNow Stock

Bank of America hiked its price target on ServiceNow stock ahead of the enterprise software maker’s third quarter earnings report due Oct. 23.

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Wall Street analysts expect ServiceNow earnings to rise 18% to $3.45 per share, with revenue climbing 20% to $2.75 billion.

Additionally, Bank of America analyst Brad Sills on Thursday hiked his price target on ServiceNow (NOW) stock to 1,075 from 950.

“The stock has outperformed on steady beat-and-raise quarters,” Sills said in a report. “However, recent concerns for potential exposure to the Carahsoft investigation in the federal vertical are weighing on sentiment.” Sills was referring to a recent FBI raid on government IT contractor Carahsoft.

ServiceNow Stock: AI Play

Long range, Sills expects artificial intelligence tools to drive revenue growth.

“ServiceNow is positioned as a tier-1 AI play, given a clear value proposition for Now Assist features specific to uses cases across IT, employee and customer workflows,” Sills said. “Now Assist is likely to become material enough for management to break out from cRPO (current remaining performance obligations) and/or net new ACV (annual contract value) in the coming quarters. That represents a catalyst for the stock.”

Further, many software makers are pivoting to AI agents as they aim to monetize artificial intelligence tools.

On the stock market today, ServiceNow stock traded sideways, last down a fraction at 916.27.

ServiceNow Stock Technical Ratings

Meanwhile, heading into the ServiceNow earnings report, the software stock has gained 30% in 2024. Shares trade above a buy zone.

The Santa Clara, Calif-based company’s software tracks and manages services provided by information-technology departments. Also, its self-service tech portal enables company employees to access administrative and workflow tools.

In addition, ServiceNow has expanded from its core business. It’s branched into software for human resources, customer service management and security.

Also, ServiceNow stock holds a Relative Strength Rating of 89 out of a best possible 99, according to IBD Stock checkup.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.

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