ServiceNow’s NOW ability to sustain growth will depend on how effectively it differentiates its AI platform as competition for enterprise spending intensifies.
ServiceNow continues to strengthen its position in enterprise AI by evolving beyond traditional workflow automation into a broader platform for AI governance, orchestration and execution. The company’s AI-native offerings, including Now Assist, Autonomous Workforce, EmployeeWorks and Workflow Data Fabric, are gaining traction as enterprises increasingly seek ways to deploy AI securely across business functions. Strong adoption of Now Assist and growing demand for AI-powered CRM solutions indicate that customers are moving beyond experimentation and investing in large-scale AI transformation initiatives.
However, the competitive landscape is becoming increasingly crowded as Microsoft, Salesforce, Google, Oracle and other software vendors aggressively expand their AI assistant, agent and automation capabilities. As enterprise customers gain access to a growing number of AI solutions, ServiceNow faces mounting pressure to differentiate its offerings and maintain its growth momentum through AI governance, workflow orchestration and security capabilities.
To strengthen its competitive position, ServiceNow has expanded into cybersecurity and identity governance through the acquisitions of Armis and Veza. These additions enhance its AI Control Tower strategy, providing enterprises with greater visibility, governance and security over AI agents and connected assets.
While rising competition remains a key risk, ServiceNow’s expanding AI ecosystem, growing security portfolio and deep enterprise integration capabilities provide meaningful competitive advantages. Supporting this view, the Zacks Consensus Estimate projects revenue growth of 21.88% in 2026 year over year, indicating confidence in the company’s ability to sustain growth despite intensifying competition.
ServiceNow Faces Mounting Pressure From AI Rivals
Microsoft MSFT is one of ServiceNow’s strongest AI competitors, backed by its cloud infrastructure, enterprise software portfolio and AI platform capabilities. Its AI business surpassed a $37 billion annual revenue run rate, while Microsoft 365 Copilot exceeded 20 million paid seats. By integrating AI across Azure, Teams, Dynamics 365 and GitHub, MSFT offers a unified enterprise AI ecosystem. Its scale and vast customer base continue to increase competitive pressure on ServiceNow.
Salesforce CRM is increasing pressure on ServiceNow through its Agentforce platform, which surpassed $1 billion in annual recurring revenue. CRM combines Agentforce, Slack, Data 360 and MuleSoft to help enterprises deploy AI agents across customer-facing workflows. The company is also expanding into IT service management, with McAfee replacing ServiceNow with Agentforce IT Service. Growing AI adoption and strong CRM data assets make Salesforce a significant competitor.
NOW’s Share Price Performance, Valuation & Estimates
ServiceNow shares have declined 33.3% year to date, underperforming the broader Zacks Computer and Technology sector’s rise of 19.4%.
NOW’s YTD Price Performance
Image Source: Zacks Investment Research
ServiceNow stock is overvalued, with a forward 12-month price/earnings (P/E) of 22.74X compared with the industry’s 17.98X. NOW has a Value Score of D.
NOW’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for ServiceNow’s 2026 earnings is pegged at $4.14 per share, unchanged over the past 30 days. The figure indicates a 17.95% increase year over year.
Image Source: Zacks Investment Research
ServiceNow stock currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).