RBC raises ServiceNow stock price target on AI momentum

Investing.com - RBC Capital has increased its price target for ServiceNow stock (NYSE:NOW) to $176 from $130 on Monday, while keeping an Outperform rating. The current stock price of $142.88, according to InvestingPro data, is considered undervalued within the software sector. The firm highlighted positive factors leading up to the company's earnings report, including enhanced investor sentiment since the second-quarter 2026 results.

RBC anticipates ServiceNow to surpass expectations due to ongoing enterprise AI momentum, strong U.S. federal backing, and a burgeoning deal pipeline. The analyst believes the company can pass a greater share of any earnings beat to 2026 estimates compared to the previous quarter. ServiceNow's financial performance supports this optimism, with revenue growing by 22% over the past year and maintaining a robust gross profit margin of 75%.

The analyst emphasized that investors are increasingly viewing ServiceNow as an appealing option to capitalize on cybersecurity momentum, a growth area for the company. RBC sees ServiceNow as well-positioned to leverage AI, reduce expenses, and raise guidance heading into year-end. For those desiring a deeper analysis, InvestingPro offers over 1,400 comprehensive Pro Research Reports that convert intricate data into practical insights.

In related news, ServiceNow has been the subject of numerous analyst assessments. Yorkville Ives initiated coverage with an outperform rating, highlighting the potential of generative AI and autonomous agents to drive the company's platforms. UBS also revised its outlook, elevating the price target to $150 due to stable demand and increased estimates for ServiceNow's third-quarter 2026 performance.

Stifel similarly raised its price target to $160, citing deal momentum and strong renewal expansion as significant contributors. Citizens assigned a Market Outperform rating with a $157 price target, influenced by ServiceNow's federal wins and CEO Bill McDermott's participation in discussions on superintelligence. These recent developments reflect a widespread optimism among analysts regarding ServiceNow's growth trajectory and strategic approach.