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On Monday, Canaccord Genuity confirmed its Buy rating on ServiceNow stock (NYSE:NOW) with a steady price target of $1,275. With a market capitalization of $160.5 billion and according to InvestingPro data, the stock is currently trading slightly below its Fair Value. ServiceNow announced its plan to acquire artificial intelligence firm Moveworks for $2.85 billion, a deal payable in cash and stock, anticipated to finalize in the second half of 2025. The acquisition aligns with ServiceNow’s strategic direction, aiming to enhance its AI-driven enterprise search capabilities and front-end AI assistants for self-service automations.
Moveworks specializes in creating an AI Assistant that integrates multiple business systems into a singular conversational interface. The technology is expected to bolster ServiceNow’s offerings across various workflows including sales, customer relationship management (CRM), finance, human resources (HR), and information technology (IT). This strategic move aligns with ServiceNow’s impressive growth trajectory, with revenue increasing by 22.4% and maintaining robust gross profit margins of 79.2% in the last twelve months. The two companies have an established collaborative relationship, with many of Moveworks’ current deployments already relying on ServiceNow as a key system to access enterprise AI. This existing partnership is anticipated to facilitate a smooth integration process post-acquisition.
ServiceNow’s move to acquire Moveworks is seen as a strategic step to strengthen its position in the enterprise AI space. The deal, which combines cash and stock, reflects ServiceNow’s commitment to expanding its AI capabilities and providing more self-service automation options to its customers. The acquisition is set to close in the latter half of 2025, marking a significant expansion of ServiceNow’s AI-driven services and solutions. For deeper insights into ServiceNow’s AI strategy and comprehensive financial analysis, access the detailed Pro Research Report available on InvestingPro, which covers over 1,400 top US stocks with expert analysis and actionable intelligence.
In other recent news, ServiceNow has announced a definitive agreement to acquire AI firm Moveworks for $2.85 billion, aiming to integrate Moveworks’ AI assistant and enterprise search technology with its own AI and automation capabilities. This strategic acquisition is expected to enhance employee engagement and productivity, although investor concerns have emerged regarding the deal’s valuation and its immediate impact on ServiceNow’s financials. Despite the skepticism, ServiceNow has reported robust growth, with nearly 1,000 AI customers and over $200 million in annual contract value for its Pro Plus AI solution as of December 31, 2024.
In analyst updates, Bernstein maintained its Outperform rating for ServiceNow, emphasizing the company’s solid performance and compound growth potential. Conversely, Erste Group downgraded ServiceNow’s stock from Buy to Hold, citing concerns over its high market valuation, which they believe limits the stock’s upside potential. Meanwhile, ServiceNow has revised its company bylaws, introducing changes such as a new forum selection clause and adjustments to stockholder actions at annual meetings. These amendments aim to streamline governance and align with regulatory changes and stockholder interests.
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