ServiceNow (NOW) stock has dropped by 23.5% in less than a month, from $136.34 on 26th Jan, 2026 to $104.27 currently. The pullback comes amid broader volatility in high-multiple software names, as investors reassess growth expectations, enterprise IT spending trends, and valuation premiums across the sector.
ServiceNow (NOW) has been one of the stocks most watched by Zacks.com users lately. So, it is worth exploring what lies ahead for the stock.
The "SaaSpocalypse" narrative has gripped Wall Street, dragging the software and tech sector down roughly 22% this year. The fear driving this sell-off is singular, terrifying, and easy to understand: artificial intelligence (AI) agents will automate white-collar work so effectively that businesses will no longer need to buy software licenses for human employees.
As the software selloff deepens, ServiceNow's CEO is buying the dip and joining others at his company in ending automated stock-selling plans.
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NOW's product surge - Now Assist, Raptor and more - fuels big enterprise wins and AI-driven growth, setting up durable revenue expansion ahead.
After reaching an all-time high of $239.62 in January 2025, ServiceNow's share price is now hovering around $104.00, a drawdown of almost 60%. Following the largest drawdown in its history, ServiceNow is currently trading at a free cash flow yield of ~4.4% and a forward price-to-earnings ratio of ~20.7x. The company's significant free cash flow generation is also underpinned by a net cash balance sheet, with total debt consisting of a 1.4% fixed-rate note due in September 2030.
So far, 2026 has been a bad time to be a software stock. The iShares Expanded Tech-Software Sector ETF BATS: IGV is a good proxy for software industry performance.
ServiceNow is the connecting layer for enterprises, as it employs its CMDB and CSDM technology to ensure companies can keep track of their operations. The firm's AI Control Tower and RaptorDB Pro products saw contract values rise substantially, as customers continue to seek out solutions for governance and scaling related to AI. ServiceNow's recent acquisitions show the company is on a path towards becoming a single platform that will help firms with both cybersecurity and orchestration of AI agents.
NOW shares are down nearly 42% in three months, but accelerating AI adoption, growing partnerships and a discounted valuation support a hold case.
Some of the biggest stocks in the technology and consumer staples sectors are kicking off 2026 with notable buyback announcements. This includes Western Digital NASDAQ: WDC, one of the market's best-performing names of 2025.
Tom Yeung here with your Sunday Digest . In the mid-2010s, Wall Street became smitten with finding the next iPhone supplier.