ServiceNow (NYSE: NOW) has been one of the hardest-hit names in this year’s rotation out of software. Shares are down about 60% from their prior highs as investors worry that artificial intelligence (AI) could disrupt enterprise software.
But the company’s first-quarter results were solid, and management continues to frame ServiceNow as the operating system that will control, secure, and monitor AI agents. While there are uncertainties about the long-term impact of AI on the software market, I think Wall Street is likely underestimating ServiceNow’s value to enterprises.
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Demand for ServiceNow’s AI product is growing rapidly
There’s no mistaking ServiceNow’s momentum heading into 2026. In the first quarter, subscription revenue grew 19% year over year to nearly $3.7 billion on a constant-currency basis. That beat expectations and led management to raise its full-year outlook. ServiceNow now expects full-year subscription revenue (adjusted for currency changes) to increase 20.5% to 21%.
These strong results partly reflect the demand for Now Assist. The company’s flagship AI product is generating $1 billion in annual revenue and is on track to reach $1.5 billion by year-end. That growth matters because it speaks to ServiceNow’s competitive position. Now Assist is being integrated into ServiceNow’s automation engine, Action Fabric, effectively turning Now Assist into the AI brain behind tasks across the platform.
In 2025, 91% of net new annual contract value came from deals that included five or more products, spanning areas like app development, sales management, and security. Customers aren’t just experimenting with ServiceNow’s AI — they’re expanding it across the enterprise.
Nvidia validates ServiceNow’s opportunity
This growing adoption of its platform shows that ServiceNow is well-positioned to become the orchestration and governance layer for AI agents operating autonomously across the enterprise. Its collaboration with Nvidia adds weight to its strategy.
At ServiceNow Knowledge 2026, Nvidia CEO Jensen Huang appeared on stage with ServiceNow CEO Bill McDermott. The companies unveiled Project Arc, an autonomous desktop agent for IT administrators and developers. Project Arc will run on Nvidia’s hardware, models, domain-specific skills, and software. This joint announcement with the AI chip leader strengthens ServiceNow’s position to become the operating system for agentic AI.
