ServiceNow (ServiceNow (NOW)) stock is having a good Tuesday. Shares rallied more than 5% in premarket trading, extending a sharp recovery from the lows the stock hit earlier this year. The catalyst? A mix of Wall Street love, a sector rotation, and some genuinely interesting AI deals.
Let's start with the analyst action. On Monday, Bank of America Securities analyst Tal Liani reinstated coverage on ServiceNow with a Buy rating and a $130 price target. That's not the highest target out there — the average across 50 analysts is $139, with a high of $236 and a low of $85 — but it's a vote of confidence from a major bank. Liani's call joins a flurry of recent analyst moves: Bernstein raised its forecast to $236 on May 6, while Macquarie held steady at $109 on May 5. The consensus remains a Buy, and the stock is responding.
But the real story might be what's happening in the broader market. Investors are rotating. After a long run in semiconductor stocks, money is flowing back into enterprise software — the sector that got absolutely hammered in 2026. ServiceNow's peers, like Salesforce (CRM) and Workday (WDAY), are also catching bids. It's a classic growth rotation: take profits in the hot stuff, buy the stuff that's been beaten down and has a clearer path to recovery.
ServiceNow also has some company-specific tailwinds. The company just wrapped up its Knowledge 2026 conference, and on Friday it announced a multi-year global partnership with Experian (EXPGF). The deal integrates Experian's Ascend platform into ServiceNow's workflows, using autonomous AI agents for high-regulation tasks like fraud verification and third-party risk management. "We see agentic AI as a fundamental change in how intelligent services are delivered," said Keith Little, President of Experian Software Solutions. That's the kind of quote that gets investors excited about the long-term potential of AI in enterprise software.
And the long-term potential is exactly what management has been selling. On May 7, President and CFO Gina Mastantuono laid out a 2030 vision: more than $30 billion in annual subscription revenue. That's a big number, but the company is backing it up with execution. ServiceNow's Now Assist product, which embeds AI into its platform, generated over $750 million in annual contract value in the first quarter of 2026 alone. And crucially, the company says it can maintain gross margins above 80% while scaling that product. That's a direct rebuttal to the fear that AI will crush margins — a fear that has weighed on the entire software sector.
So where does that leave the stock? ServiceNow shares were trading at $108.78 in premarket Tuesday, up 5.18%. Over the past month, the stock has gained about 11.6%, compared to a 4.2% rise in the S&P 500. But year-to-date, it's still down roughly 29%, versus the S&P's 7.7% gain. That's a lot of ground to make up, but with a rotation underway, a fresh analyst endorsement, and a compelling AI story, ServiceNow is making a case that the worst is behind it.
