ServiceNow's unexpected expense surge makes its rich valuation more vulnerable in a struggling software sector. Revenue rose 21%, but spending drove an EPS miss and one quarter of guided cRPO deceleration; wider market conditions could hurt near term. The 20% selloff looks excessive, and few software companies should benefit as much from AI. Management could deliver over 3-5 years, though the stock is only close to a buy again now; below $100 looks good for the long term. x.com  x.com  x.com  x.com 

AI needs a boss, and ServiceNow has spent years building that management layer; now its earnings are catching up with the thesis. Per @ParadisLabs, Q2 subscription revenue rose 23% to $3.9B, operating margin hit 30% versus 27% expected and EPS was $0.90 versus $0.86, though Q3 subscription guidance of $4.0B trailed the $4.1B estimate. @ParadisLabs adds that no credible CTO will swap ServiceNow for an AI tool with uncertain ROI. x.com 

ServiceNow's seat business is being cannibalized faster than AI deals can replace it. Next-quarter cRPO growth is guided to 18.5%, down from 20.5%, while subscription growth was 24.5% two quarters ago; agentic usage on its platform is up 13x. Management points to AI deal value heading to $1.7bn, against a roughly $16bn subscription business. The slowdown leaves more pain ahead. Underweight, $90 target. x.com  x.com 

ServiceNow's AI contract growth and improving free cash flow margin make the 18% selloff excessive and its shares a massive discount among leading enterprise AI companies. AI net-new ACV rose 65%; its 2026 AI ACV target rose to $1.7B, up 70% from the start of the year. Adjusted operating margin slipped to 32.5% from 33.5%, but free cash flow margin rose to 20% from 17.5%. Acquisition costs, stock compensation and severance largely drove the GAAP decline. x.com  x.com  x.com 

ServiceNow's Q2 shows fears of AI killing the business were overdone. Per @StockSavvyShay, revenue was $3.99B against $3.92B expected, EPS $0.90 against $0.86, and operating margin 30% against 27%, while AI annual contract value crossed $1B. Q3 cRPO growth was guided to 19.5% versus 18.5% expected, though subscription revenue guidance of $4.0B came in below the $4.1B estimate. x.com 

ServiceNow's slowing contracted-revenue growth suggests agentic AI and growing open-source alternatives may be reducing the need for its products. Q3 operating margin fell to 9.4% from 16.8% a year earlier, net income dropped, and cRPO growth slowed from 25% to 20.5%; Q4 guidance implies 18.5%. x.com 

ServiceNow is priced as if AI agents will replace it, yet its numbers show AI becoming its biggest growth driver. Q2 revenue grew 24% to $3.9B, faster than last quarter, earnings beat by almost 5% and full-year guidance rose for the second time. Its AI products crossed $1B in annual contract value, renewals were 98%, and $1M+ deals rose 40% to 123. AI infrastructure costs have squeezed margins slightly, and AI shrinking software budgets over 5-10 years is a fair bear risk. x.com 

ServiceNow's third-quarter subscription revenue, cRPO and operating-margin beats make its double-digit selloff look overdone. After a 77% rise from April lows, it needed a big beat and raise; lower fourth-quarter cRPO guidance and back-loaded implications for $30-$32 billion in subscription growth by 2030 leave the stock in show-me mode. x.com 

ServiceNow's gross profit and expense trends show its underlying business deteriorating despite the AI revenue pitch. Quarterly gross profit grew just over 10% year over year, possibly its slowest pace ever, while expenses rose across the board and profit weakened materially. Relabeling revenue as AI has not changed the trend in total sales. x.com 

ServiceNow keeps selling more to existing customers over time, one of the biggest reasons to be bullish long term. Its 2011 customer cohort's annual contract value grew from an indexed $100 to $3,730 by Q3 2026, or 37.3x, even including customer losses. x.com