ServiceNow’s stock price has had a particularly volatile time over the last week. Between Monday and Friday (April 6-10), it lost a staggering 19% of its value, much of that due to a downbeat market valuation from UBS. While the stock has had a tough time in recent months, this is a particularly sharp drop.
But it’s not all bad news for ServiceNow. Barely a working day later, the stock shot back up by 7.3%, in response to another analyst rating from Bernstein – this one much more positive.
All this stock price drama comes at a particularly acute moment for ServiceNow, with the company’s Q1 2026 earnings figures being due just next week, on April 22, 2026. When that happens, investors and analysts alike will be poring over the numbers to work out which analyst was closest to the mark.
ServiceNow: A Victim of the SaaSpocalypse?
“To date, our view has been that ServiceNow is better-positioned for this AI era relative to other application software firms and hence it has been our only Buy-rated application software stock, as we’ve been quite cautious on the broader group. Given that our confidence in that view has weakened and we’re hearing more anecdotes of non-AI apps software budget pressure, we’re moving to a Neutral rating.”
Karl Keirstead, UBS Analyst [Source: Street Insider]
Over the last few months, ServiceNow’s stock price has had a particularly rough time. Its closing value at the start of last week (April 6), $102.42, was already down 30.5% since the $147.45 recorded at the start of the year. This trend isn’t just confined to 2026: Through last year, it steadily reduced from its all-time peak of $225 in January 2025.
And perhaps the most interesting thing about this process is this: ServiceNow has consistently beaten financial guidance and expectations over the same period. Now, ‘ServiceNow earnings up, stock down’ has become an all-too-familiar headline.
So, it’s clear that last week’s downbeat UBS rating didn’t come out of nowhere. The UBS analyst, Karl Keirstead, downgraded the stock’s rating from ‘Buy’ to ‘Neutral’. It also cut the price target from $170 to $100. Broadly, this decision was down to growing evidence that organizations were reallocating IT budgets away from traditional software categories toward new AI tools. This plays into wider market concerns about the viability of the SaaS operating model – a phenomenon dubbed the ‘SaaSpocalypse’.
In response, the stock dropped to $83 by the close of Friday (April 10). This marked the lowest value for the stock since 2023, and a drop of 19% since the start of the week.
Most interestingly, UBS also predicted that growth across key financial metrics would be weaker in the coming quarters than we saw across 2025 and at the start of this year. Given that the next round of figures is due next week, we won’t have to wait long to find out if they’re right.
Can ServiceNow Convince Investors It’s More Than Just SaaS?
Not everybody takes the same view as UBS. On Monday this week, the much more positive analyst rating from Bernstein helped take the sting out of Friday’s market meltdown. In contrast to the UBS view, it maintained its ‘Outperform’ rating and held the price target at $219.00. This is more than twice the value of the UBS target.
In response to Bernstein’s rating, the ServiceNow stock price jumped up again to $89.06 by the end of Monday this week (April 13). This will certainly give execs a spring in their step as they look forward to the Q1 earnings release next week. In the days since, it’s gradually crept back up again, closing at $94.19 on April 15, 2026.
Clearly, Bernstein’s view is more bullish. It rests on the assumption that ServiceNow is more than just another SaaS vendor. In fact, the company’s underlying infrastructure (in particular, the CMDB) lays a crucial foundation for customers to successfully adopt AI, Bernstein suggests.
This view aligns neatly with ServiceNow’s own messaging. For some time, the organization has been positioning itself as the ‘AI operating system’. Tools like the AI Control Tower take advantage of ServiceNow’s technical heritage, aiming to build a secure foundation for successful AI adoption.
In this reading, ServiceNow isn’t a victim of the AI transformation – it’s a crucial enabler of it. Unsurprisingly, this is much closer to ServiceNow’s own view.
All Eyes on Q1 Earnings: What to Expect from Next Week’s Release
Clearly, next week’s earnings results will give some vital clues as to which view is correct. So what should we be looking out for?
Last quarter, ServiceNow updated its guidance for Q1 2026, predicting $3.65B in subscription revenues, a year-on-year increase of 21.5%. It also expects a rise of 22.5% in current remaining performance obligations (cRPO).
The company has consistently beaten its guidance predictions in the last few quarters, and there’s every chance that it could do the same again next week. But if it fails to meet these targets, analysts could well take the view that the only way is down for ServiceNow and its stock.
But if ServiceNow beats its guidance again, there’s every chance that the stock could start to look increasingly undervalued.
One key metric to look out for is the performance of Now Assist, the company’s flagship agentic AI tool. Last quarter, it surpassed $600M in annual contract value (ACV), well on track for its goal of $1B+ ACV target for 2026. If this trajectory continues or even accelerates, it could vindicate ServiceNow’s message that it’s an enabler of the AI transition, rather than a victim.
Keep your eyes peeled for our follow-up article next week, where we’ll be running through the figures in more detail and considering the implications they have for ServiceNow and its stock price.