ServiceNow shares gained as much as 14% intraday on May 19, as a wave of renewed optimism swept through enterprise software stocks. The catalyst: a growing consensus that AI isn’t going to destroy companies like ServiceNow. It might actually make them more valuable.
The move caps what’s shaping up to be a record month for the stock, which had been left for dead earlier this year after falling more than 40% from its 52-week high near $211.
What changed
BofA Securities reinstated coverage of ServiceNow with a Buy rating and a $130 price target. That alone was enough to shift the mood, but the real story is bigger than one analyst note.
For months, the market had been operating under a simple and terrifying thesis: AI is coming for SaaS. The logic went something like this. If large language models can automate workflows, why would enterprises keep paying premium subscription fees for platforms that do the same thing? That fear sent ServiceNow shares tumbling 18% after its Q1 2026 earnings report in April, even though the actual numbers were objectively strong.
