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On Friday, ServiceNow (NYSE:NOW)stock received a new Overweight rating from Cantor Fitzgerald, accompanied by a price target of $1,332.00. The firm's initiation of coverage on the cloud computing company highlights its successful expansion beyond its original IT help desk focus into automating a wide array of organizational workflows, from HR to Customer Service.
ServiceNow's growth strategy has been effective, particularly in increasing spend among large enterprise customers. The company reported a 40% increase in customers with an annual contract value (ACV) over $20 million in the third quarter of 2024, and it now boasts at least two customers with over $100 million ACV.
Cantor Fitzgerald's analysis indicates a near consensus on ServiceNow's platform status, emphasizing its role as a system of record within the configuration management database (CMDB) at numerous IT service management (ITSM) clients.
The company's position in the market is further strengthened by its ability to win requests for proposals (RFPs) aimed at consolidating workflow vendors, thanks to its core ITSM workflows. Additionally, ServiceNow's focus on artificial intelligence (AI) is noted as a significant advantage.
The launch of higher-priced products with AI functionalities, such as Now Assist and AI Agents in Fall 2023, is expected to substantially contribute to the company's growth, with a potential 30% price increase for these services.
ServiceNow's trajectory suggests that its cloud-based workflow automation platform is not only gaining market share but also becoming increasingly integral to its customers' operations. The firm's ability to automate workflows and redundant tasks positions it well within the AI space, which Cantor Fitzgerald identifies as the "DNA of AI."
The analyst firm's positive outlook on ServiceNow is based on thorough checks and a consensus view on the company's platform. With ServiceNow's strategic positioning and innovative offerings, the Overweight rating and $1,332.00 price target reflect confidence in the company's continued growth and market leadership.
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