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The AI story got a fresh coat of paint
ServiceNow spent Thursday doing what every software stock dreams of: convincing Wall Street it can grow big and stay pretty. The company laid out a path to more than $30 billion in annual subscription revenue by 2030, with President and CFO Gina Mastantuono saying there may even be upside beyond $32 billion.
That’s a fancy way of telling investors: the AI party is still early, and we want you to keep dancing.
Why the stock is popping
Analysts heard the pitch and started nudging their models higher. The stock’s average price target sits at $139.35, and the recent round of updates included:
- Bernstein: Market Perform, target raised to $236
- Barclays: Overweight, target raised to $134
- Evercore ISI: Outperform, target raised to $150
- Macquarie: Neutral, target maintained at $109
- DA Davidson: Buy, target maintained at $190
Meanwhile, shares were up 5.45% to $93.90 at the time of publication. Not exactly a moonshot, but definitely a nice little caffeine hit for a name that’s been trying to rebuild momentum.
The part investors care about: margins
The real suspense with AI software isn’t whether companies can slap “AI” on the slide deck. It’s whether the economics hold up.
ServiceNow said it expects:
- gross margins above 80% even as AI adoption rises
- 100 basis points of expansion in operating and free cash flow margins in 2027
- a “Rule of 60+” by 2030, where revenue growth plus free cash flow margins make the math look deliciously tidy
So yes, the company is basically promising to grow like a hungry startup while acting like a disciplined blue-chip adult. Ambitious? Very. Impossible? Not obviously.
Big picture
Now Assist is becoming the centerpiece of the story. ServiceNow said the product topped $600 million in annual contract value in 2025 and passed $750 million in the first quarter of 2026. Management now expects it to more than double to over $1.5 billion by year-end.
That’s the kind of number that makes analysts reach for their target-price spreadsheet. For investors, the question is whether ServiceNow can keep turning AI hype into real subscription cash without the margin machine sputtering. If it can, this rally may have legs. If not, today’s pop could end up feeling like a very expensive sugar rush.