Benchmark strongly supports ServiceNow (NOW.US): After being wrongly killed by AI panic, it welcomes a good opportunity to bottom out, with the stock price expected to rise to $125.

Investment bank Benchmark initiates coverage of ServiceNow (NOW.US) for the first time, giving it a "buy" rating with a target price of $125. This target price represents a potential upside of approximately 20% from the stock's closing price of $104.04 on Wednesday. Analyst Yi Fu Lee stated, "We are initiating coverage on ServiceNow with a 'buy' rating and a target price of $125, as its cloud architecture platform can seamlessly integrate artificial intelligence (AI), data, security, and automated workflows to unleash the potential for efficient enterprise collaboration through digital transformation. We believe the market's punishment of ServiceNow lacks a rational basis, as the stock has declined by approximately 45% since its peak in January 2025, possibly due to concerns about the impact of AI/Generative AI (GenAI) and the expansion from a series of acquisitions last year. We view ServiceNow as one of the beneficiaries of the Agentic AI supercycle and believe patient investors should take advantage of this market sell-off opportunity to gradually increase their holdings in this high-quality, profitable SaaS growth company." The analyst believes that as AI tokens are gradually embedded into daily critical task level workflows or operational processes, ServiceNow's trusted platform will gain upward revenue potential. The analyst added that ServiceNow's success stems from its flexible open architecture, cloud agnosticism, support for large language models (LLM), diverse data sources, and extensive system integration capabilities. The analyst stated, "We believe there is a symbiotic relationship between AI/frontier LLM providers and ServiceNow, both of which need each other to increase the likelihood of mutual success. ServiceNow has built a savvy 'universal mousetrap' where customers can benefit whether they are building systems on other platforms and managing security through ServiceNow's AI Control Tower, or directly using its IT service platform." Furthermore, the analyst noted that the market's unfounded concerns regarding the impact of AI/Generative AI have actually provided an attractive entry point. The analyst believes that ServiceNow has strategically positioned itself as a trusted operational platform for handling global organizational workflows and can collaborate with leading AI/frontier LLM providers to deploy AI agents globally. Additionally, the analyst stated that the busy 2025 acquisition schedule is strengthening ServiceNow's technology roadmap and expanding its total addressable market (TAM). The analyst said, "The acquisitions of Armis/Veza strengthen their presence in the security sector, the acquisition of Moveworks enhances AI assistant and search capabilities, while the acquisition of Logik.io complements their configure, price, quote (CPQ) platform capabilities. We believe ServiceNow's network security segment in its product portfolio is already well-prepared and they may continue to pursue strengthening acquisitions to enhance their breadth in talent, technology, and TAM expansion, positioning them beyond a potential market size of $600 billion." The analyst also expressed confidence in ServiceNow CEO Bill McDermott and his leadership team.