ServiceNow shares surged 8.5 percent Wednesday, closing with a 7 percent gain, after BofA analyst Tal Liani raised his price target to $150 from $130—implying 26 percent upside from Tuesday's close.
Liani, a longtime bull, maintained his buy rating and attributed the increase to a market recalibration on software stocks as AI disruption concerns fade. The shift is driving broad multiple expansion across the sector.
The thesis hinges on a corrected narrative. The popular bet that AI agents will obsolete SaaS companies is proving too simplistic. Instead, ServiceNow's platform—deeply embedded in customer workflows—will become more valuable as a critical gatekeeper for AI systems. Its tools provide context and guardrails for agents, reducing execution risk.
ServiceNow trades at 31 times forward earnings, a 37 percent discount to its three-year average multiple of 49. That gap offers real opportunity for investors willing to bet on the company's AI leverage.
Rising subscription revenue and expanding deal sizes underscore the execution. Customer feedback on ServiceNow's AI integration and hybrid pricing model has reinforced confidence in the trajectory.
