• Earlier this month, IBM and ServiceNow announced an expanded collaboration to combine IBM’s AI, data and automation capabilities with the ServiceNow AI Platform, aiming to help large enterprises modernize legacy applications, improve data readiness, and roll out agentic AI across core IT and business operations from the second half of 2026.
• This deeper alignment positions ServiceNow at the center of IBM-powered application modernization and data governance projects, potentially making its platform a default workflow layer for enterprises looking to turn aging systems and fragmented data into production-grade AI initiatives.
• We’ll now examine how this expanded IBM collaboration, especially around modernizing legacy systems for AI, may influence ServiceNow’s investment narrative.

Rare earth metals are the new gold rush. Find out which 31 stocks are leading the charge.

ServiceNow Investment Narrative Recap

To own ServiceNow, you need to believe its AI platform becomes core plumbing for large enterprises, with agentic AI and workflow automation offsetting today’s premium valuation and recent share price weakness. The IBM partnership reinforces the AI-and-workflows thesis, but its solutions are not expected until the second half of 2026, so the near term catalyst likely remains execution on AI adoption targets, while key risks still center on competitive AI pressure and integration drag from acquisitions on margins.

Among the recent announcements, Cognizant’s integration of Neuro AI Trust with the ServiceNow AI Platform feels most relevant, because it reinforces ServiceNow’s push to embed governance and continuous assurance into AI workflows. If AI Control Tower and assurance tooling become must-have features for regulated customers, that could support the AI platform growth narrative, but it also raises execution risk if governance standards, costs, or regulatory expectations shift faster than ServiceNow can adapt.

Yet beneath the AI growth story, investors should also be alert to how rising AI spend and complex integrations could pressure margins and...

ServiceNow's narrative projects $23.6 billion revenue and $4.0 billion earnings by 2029. This requires 19.1% yearly revenue growth and about a $2.2 billion earnings increase from $1.8 billion today.

Uncover how ServiceNow's forecasts yield a $141.86 fair value, a 36% upside to its current price.

Exploring Other Perspectives

The most bullish analysts were already assuming ServiceNow could reach about US$26.1 billion in revenue and roughly US$5.7 billion in earnings by 2029, so compared with the baseline focus on gradual AI platform adoption, they are much more optimistic that AI driven pricing and alliances will pay off quickly. In light of the IBM deepening, you should weigh that enthusiasm against risks like hybrid pricing execution and ask whether these pre news projections still feel realistic.

Explore 18 other fair value estimates on ServiceNow - why the stock might be worth just $108.81!

The Verdict Is Yours

Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

• A great starting point for your ServiceNow research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free ServiceNow research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate ServiceNow's overall financial health at a glance.

No Opportunity In ServiceNow?

Markets shift fast. These stocks won't stay hidden for long. Get the list while it matters:

• Find 47 companies with promising cash flow potential yet trading below their fair value.
• We've uncovered the 9 dividend fortresses yielding 5%+ that don't just survive market storms, but thrive in them.
• Uncover the next big thing with 23 elite penny stocks that balance risk and reward.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.