ServiceNow stock price target lowered to $1,075 by UBS on mixed AI feedback

Investing.com - UBS lowered its price target on ServiceNow (NYSE:NOW) to $1,075.00 from $1,100.00 on Tuesday, while maintaining a Buy rating on the stock ahead of the company’s third-quarter earnings report. The company, currently valued at $188.78 billion, has demonstrated impressive gross profit margins of 78.5% and achieved 21% revenue growth over the last twelve months, according to InvestingPro data.

The price target adjustment comes after UBS conducted checks with ServiceNow partners and customers to assess the company’s momentum in the third quarter of 2025. UBS found that the core business performance appeared "fine/solid," suggesting ServiceNow is positioned for a normal earnings beat. InvestingPro analysis indicates the stock is currently trading near its Fair Value, with 13 additional exclusive insights available to subscribers.

However, feedback regarding artificial intelligence adoption was "somewhat disappointing," according to UBS. This aligns with similar feedback the firm has received in its checks on other Software-as-a-Service (SaaS) companies.

UBS noted that sentiment in the SaaS and applications sector is already cautious, describing it as "perhaps the worst in years." Despite this challenging environment, the firm maintained its Buy rating on ServiceNow.

ServiceNow is scheduled to report its third-quarter 2025 financial results on October 29. UBS highlighted that the stock is currently trading at approximately 36 times calendar year 2026 earnings for roughly 20% growth, suggesting "near-term downside could be limited."

In other recent news, ServiceNow introduced its AI Experience, a conversational interface designed to integrate artificial intelligence across enterprise workflows. This new tool aims to enhance employee interactions with AI using voice, text, and image modalities. Additionally, ServiceNow launched the Zurich platform, which focuses on multi-agent AI development and enterprise security, enabling natural language application creation through "vibe coding." In terms of corporate transactions, ServiceNow filed an amendment for the resale of shares linked to its acquisition of Logik.io, involving an additional 609 shares. This filing updates the company’s previous registration statement with the SEC.

On the analyst front, Oppenheimer reiterated its Outperform rating for ServiceNow, setting a price target of $1,150, based on insights from a significant ServiceNow partner. Stifel also maintained a Buy rating with a $1,200 price target, noting improvements in the company’s Enterprise and Commercial selling environment. These recent developments reflect ongoing strategic initiatives and analyst confidence in ServiceNow’s market position.

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