Needham raises ServiceNow stock price target on AI positioning
Needham has raised its price target on ServiceNow shares to $155, up from $115, while maintaining a Buy rating. ServiceNow's stock currently trades at a P/E ratio of 82.15 and a market cap of $135.6 billion. According to InvestingPro analysis, the stock appears undervalued relative to its Fair Value. Needham highlighted constructive client engagement and rising investor interest in software systems as contributing factors.
The firm also noted ServiceNow's strong positioning and roadmap, especially for AI Governance, which has become a hot-button topic based on recent fieldwork. ServiceNow shares have risen 37% since the company reported second-quarter fiscal 2026 earnings, compared to a 1% gain for the S&P 500. This rally followed a solid beat-and-raise and shifting sentiment, driven by ServiceNow's recent quarterly results and a reduced focus on software-as-a-service spending concerns.
Analyst firms such as D.A. Davidson and Bernstein have also expressed positive sentiments towards ServiceNow, citing its strong performance and ambitious AI strategy. Meanwhile, software companies overall have seen gains amidst a broader tech sector decline, influenced by concerns about artificial intelligence.
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