ServiceNow (NOW) shares fell more than 3% on Thursday, moving in the opposite direction of a strong market rally. While the Nasdaq climbed 2.48% and the S&P 500 gained 1.22%, ServiceNow slid to $102.71, leaving investors wondering what's going on.
The decline looks like stock-specific selling rather than a broader tech pullback. The technology sector actually led the market higher on Thursday, but ServiceNow bucked the trend. That kind of divergence often happens when traders take profits after a recovery rally or sell into resistance levels. Market breadth was solid — nine of 11 sectors were up, and the advance-decline ratio hit 4.5 — making ServiceNow's weakness stand out even more.
Technical Picture: Mixed Signals
ServiceNow's chart tells a story of a stock trying to find its footing. At $102.71, the shares are about 4% below their 20-day moving average of $107.93 and roughly 2.4% below the 100-day average of $106.14. That suggests the stock hasn't regained its short-term momentum yet.
On the brighter side, the stock is still about 4.2% above its 50-day moving average of $99.44, which means this pullback looks more like a pause in a recovery attempt than a fresh breakdown. The relative strength index sits at 49.08 — a neutral reading that tells us momentum isn't screaming in either direction.
But the longer-term picture is still a concern for bulls. The 50-day moving average remains below the 200-day moving average, a bearish setup known as a "death cross" that formed back in August 2025. That pattern typically means rallies could face selling pressure until the broader trend improves. Key resistance sits near $111, while support is around $85.50, just above the stock's 52-week low of $81.24.
IBM Partnership: A New AI Chapter
Separately, ServiceNow and IBM (IBM) announced an expanded partnership on Thursday, aiming to help enterprises modernize legacy systems, improve data readiness, and deploy AI at scale. The collaboration combines IBM's AI, data, and automation tools with the ServiceNow AI Platform, focusing on application modernization, enterprise data governance, and autonomous IT operations.
The companies said the joint solutions will help customers unlock enterprise data, automate workflows, and support agentic AI adoption. The offerings are expected to be available in the second half of 2026. It's a longer-term catalyst, but one that could help ServiceNow's premium valuation story.
Earnings and Analyst Outlook
ServiceNow's next earnings report is expected on July 22, 2026. Analysts are looking for earnings of 76 cents per share, down from 82 cents a year earlier, while revenue is projected to rise to $3.93 billion from $3.21 billion. The stock trades at about 63.1 times earnings — a premium that reflects high expectations but also leaves little room for error.
Wall Street still likes the stock, with a Buy consensus rating and an average price target of $139 based on 50 analyst ratings. Recent analyst actions include:
- Bank of America Securities: Buy, $130 price target (May 18)
- Bernstein Research: Market Perform, raised price target to $236 (May 6)
- Macquarie Group: Neutral, maintained $109 price target (May 5)
So while Thursday's dip might sting, the longer-term story — AI partnerships, steady revenue growth, and analyst support — remains intact. For now, the stock is in a waiting game, trying to break through resistance and shake off that death cross.
