NOW
BMO hit the brakes
ServiceNow got a fresh reality check on Tuesday after BMO Capital Markets chopped its price target from $170 to $120. That’s the kind of move that makes the stock market feel like a group chat: one person changes their mind, and everybody starts squinting at the whole situation.
Shares fell about 1.4% into the high-$80s on above-average volume, and BMO wasn’t alone. RBC and Goldman also trimmed their numbers, even though the consensus rating across Wall Street is still hanging around a Moderate Buy.
The numbers weren’t the problem
Here’s the funny part: ServiceNow’s actual business still looks pretty sturdy. The company posted adjusted EPS of $0.92 versus estimates of $0.89, and revenue came in at $3.57 billion, up 20.7% year over year.
So this wasn’t a “the business is falling apart” moment. It was more of a “valuation police are back on duty” moment. When analysts start yanking targets lower while the company is still beating expectations, you’re usually looking at nerves about what the stock should be worth — not necessarily what the company is doing day to day.
AI, partnerships, and the long game
ServiceNow also announced a strategic partnership with Qlik to pipe governed enterprise data into AI-powered workflows. Translation: it wants to make its workflow software even more useful in the AI era, which is exactly the kind of thing investors want to hear when everyone’s trying to figure out who actually benefits from the AI boom.
Add in heavy institutional ownership and a business that keeps growing nicely, and you get a stock that’s not broken — just annoyingly expensive-looking to some analysts.
Big picture: ServiceNow is still showing up with solid fundamentals, but Wall Street is clearly in a mood. For investors, the question is whether the AI and enterprise software story can outrun the valuation hangover.