ServiceNow, Inc. (NYSE: NOW) drew bullish analyst commentary Monday as analysts pointed to strong enterprise AI demand, federal spending, and cybersecurity opportunities ahead of its third-quarter earnings on Oct. 28.

Analysts expect earnings per share of $1.03, up from 96 cents a year earlier, and revenue of $4.09 billion, compared with $3.41 billion in the prior-year period.

The stock carries a Buy rating with an average price forecast of $148.93. Recent analyst moves include:

• RBC Capital analyst Matthew Hedberg maintained an Outperform rating and raised the price forecast from $130 to $176 on Monday.
• BTIG analyst Allan Verkhovski reiterated a Buy rating and maintained a price forecast of $170 on Monday.
• Argus Research analyst Joseph Bonner kept a Buy rating and boosted the price forecast from $134 to $170 on Friday.

RBC Expects Earnings Beat, Sees AI and Federal Demand Supporting Growth

RBC Capital analyst Matthew Hedberg expects ServiceNow to beat expectations and incorporate more of the upside into its calendar-year 2026 estimates than it did last quarter.

Hedberg cited enterprise AI demand, strength in U.S. federal spending and a growing deal pipeline as positives.

The analyst also sees cybersecurity as an expanding growth opportunity, with ServiceNow positioned to monetize AI, consolidate customer spending and raise guidance toward year-end.

While the analyst does not expect customers to buy additional Now Assist packs, he sees the roughly 30% annual contract value (ACV) uplift from Pro Plus remaining stable.

Key areas to watch on the earnings call include federal contract execution and seasonality, progress toward the $1.5 billion AI ACV target, cybersecurity momentum and cross-selling of core ITSM, ITOM and CMDB products following acquisitions.

Other areas of focus include adoption of Flow, a conversational AI-native service desk designed to expand ServiceNow's reach across the Fortune 500 and support future product sales, as well as gross margins amid changes in consumption mix and hyperscaler growth, Hedberg added.

BTIG Sees AI Opportunity As Underappreciated

BTIG analyst Allan Verkhovski views ServiceNow's AI opportunity as underappreciated. He projects 22.0% constant-currency current remaining performance obligations (cRPO) growth in the third quarter, while fourth-quarter guidance could reach 20.0%, above management's 19.5% baseline.

Verkhovski also sees potential for the company to beat and raise subscription revenue estimates, supported by U.S. Federal demand, easier year-over-year comparisons and Armis' fourth-quarter contribution.

U.S. Federal contract renewals and upgrades to the Advanced pricing tier are key areas to watch following the July 1 end of sales for legacy tiers, he added.

AI Control Tower, AI Workflow Factory and Autonomous Engineer could support further AI adoption as enterprises focus on automation, data sovereignty and security. However, budget constraints, seat optimization and return-on-investment scrutiny remain challenges among SMB and mid-market customers, Verkhovski noted.

NOW Price Action: ServiceNow shares were up 0.24% at $141.19 at the time of publication on Monday, according to market data.