ServiceNow (NYSE:NOW) Shares Gap Up – Here’s Why

ServiceNow, Inc. (NYSE:NOW) gapped up before the market opened on Friday . The stock had previously closed at $108.73, but opened at $118.48. ServiceNow shares last traded at $121.5950, with a volume of 14,098,669 shares changing hands.

Key Headlines Impacting ServiceNow

Here are the key news stories impacting ServiceNow this week:

• Positive Sentiment: Partner Snowflake’s strong earnings are helping lift sentiment across AI and enterprise software names, and ServiceNow is benefiting from the read-through as a workflow platform closely tied to AI adoption. ServiceNow Stock (NOW) Gets a Boost from Snowflake Earnings
• Positive Sentiment: Wipro expanded its partnership with ServiceNow to deploy agentic AI workflows across enterprise functions, reinforcing demand for ServiceNow’s automation tools and suggesting growing commercial traction for its AI strategy. Wipro stock gains 4%: can its ServiceNow tie-up drive growth?
• Positive Sentiment: Several reports note unusually strong call-option activity in NOW, which can signal traders are positioning for further upside. ServiceNow Sees Unusually High Options Volume (NYSE:NOW)
• Neutral Sentiment: ServiceNow’s Chief Marketing Officer Colin Fleming is leaving to join OpenAI, a move that may raise questions about leadership turnover, but it also highlights the company’s relevance in the AI ecosystem. ServiceNow Stock Is Trending Higher After CMO Joins OpenAI
• Neutral Sentiment: Analyst commentary continues to focus on whether ServiceNow can maintain growth amid rising AI competition, with investors watching whether governance, security and enterprise integration can keep it winning budgets. Can ServiceNow Sustain Its Growth Amid Rising AI Competition?

Analysts Set New Price Targets

Several research firms have recently commented on NOW. Royal Bank Of Canada restated an “outperform” rating and issued a $121.00 price target on shares of ServiceNow in a report on Tuesday, May 5th. KeyCorp set a $85.00 price target on shares of ServiceNow and gave the company an “underweight” rating in a report on Thursday, April 23rd. HSBC reduced their price target on shares of ServiceNow from $226.00 to $171.00 and set a “buy” rating for the company in a report on Thursday, April 16th. Jefferies Financial Group restated a “buy” rating and issued a $135.00 price target (down from $175.00) on shares of ServiceNow in a report on Thursday, April 23rd. Finally, Robert W. Baird reduced their price target on shares of ServiceNow from $125.00 to $118.00 and set an “outperform” rating for the company in a report on Thursday, April 23rd. Two equities research analysts have rated the stock with a Strong Buy rating, thirty-five have issued a Buy rating, five have issued a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat.com, the company presently has a consensus rating of “Moderate Buy” and an average target price of $141.85.

ServiceNow Stock Up 14.0%

The company has a 50-day moving average of $97.84 and a 200-day moving average of $123.73. The company has a market capitalization of $127.77 billion, a price-to-earnings ratio of 74.04, a price-to-earnings-growth ratio of 1.69 and a beta of 0.82. The company has a current ratio of 0.84, a quick ratio of 0.84 and a debt-to-equity ratio of 0.13.

ServiceNow (NYSE:NOW) last announced its earnings results on Wednesday, April 22nd. The information technology services provider reported $0.97 earnings per share (EPS) for the quarter, meeting the consensus estimate of $0.97. ServiceNow had a return on equity of 18.16% and a net margin of 12.59%.The company had revenue of $3.77 billion for the quarter, compared to analyst estimates of $3.75 billion. During the same period in the prior year, the company posted $0.81 EPS. The firm’s quarterly revenue was up 22.1% compared to the same quarter last year. On average, equities analysts predict that ServiceNow, Inc. will post 2.35 earnings per share for the current fiscal year.

Insider Activity at ServiceNow

In other news, Director Anita M. Sands sold 16,445 shares of the stock in a transaction dated Thursday, May 14th. The stock was sold at an average price of $90.14, for a total value of $1,482,352.30. Following the transaction, the director directly owned 30,090 shares of the company’s stock, valued at approximately $2,712,312.60. This represents a 35.34% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. Also, insider Jacqueline P. Canney sold 8,927 shares of the stock in a transaction dated Friday, April 24th. The shares were sold at an average price of $89.60, for a total value of $799,859.20. Following the completion of the transaction, the insider directly owned 29,531 shares in the company, valued at $2,645,977.60. This represents a 23.21% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Over the last 90 days, insiders have sold 28,071 shares of company stock worth $2,529,956. 0.34% of the stock is owned by company insiders.

Institutional Inflows and Outflows

A number of hedge funds have recently modified their holdings of NOW. Vanguard Group Inc. increased its stake in shares of ServiceNow by 404.5% in the fourth quarter. Vanguard Group Inc. now owns 101,963,384 shares of the information technology services provider’s stock worth $15,619,771,000 after acquiring an additional 81,752,460 shares during the period. State Street Corp increased its stake in shares of ServiceNow by 406.6% in the fourth quarter. State Street Corp now owns 47,896,597 shares of the information technology services provider’s stock worth $7,337,280,000 after acquiring an additional 38,441,898 shares during the period. Price T Rowe Associates Inc. MD increased its stake in shares of ServiceNow by 371.0% in the fourth quarter. Price T Rowe Associates Inc. MD now owns 32,395,663 shares of the information technology services provider’s stock worth $4,962,692,000 after acquiring an additional 25,517,218 shares during the period. Geode Capital Management LLC increased its stake in shares of ServiceNow by 404.8% in the fourth quarter. Geode Capital Management LLC now owns 23,512,428 shares of the information technology services provider’s stock worth $3,591,425,000 after acquiring an additional 18,854,775 shares during the period. Finally, Morgan Stanley grew its holdings in ServiceNow by 335.6% during the fourth quarter. Morgan Stanley now owns 22,733,483 shares of the information technology services provider’s stock worth $3,482,543,000 after acquiring an additional 17,514,679 shares during the period. 87.18% of the stock is owned by institutional investors and hedge funds.

ServiceNow Company Profile

ServiceNow (NYSE: NOW) is a cloud computing company that builds enterprise software to manage digital workflows and automate business processes. Its offerings are designed to replace manual work and legacy systems with cloud-based, service-oriented applications that support IT operations, customer service, human resources, security response and other enterprise functions.

The company’s flagship product family is the Now Platform, a suite of subscription software and platform services that includes IT Service Management (ITSM), IT Operations Management (ITOM), IT Business Management (ITBM), Customer Service Management (CSM), HR Service Delivery, Security Operations and Asset Management.