ServiceNow Cut to Neutral, Price Target Slashed to $100 on AI Risks
ServiceNow was downgraded by UBS to Neutral from Buy, with its price target cut from $170 to $100 as AI-driven budget constraints and seat growth risks in its CSM segment raise concerns. The move comes amid a broader software sell-off that saw cybersecurity names like Qualys drop 13% and peers fall around 11%.
1. UBS Downgrades ServiceNow on AI Concerns
UBS analyst Karl Keirstead downgraded ServiceNow from Buy to Neutral and lowered the price target from $170 to $100, citing weakened confidence in the company’s resilience to AI disruption. UBS flagged customer anecdotes of non-AI software budget cuts, limited appetite for agent orchestration, and potential headcount reductions affecting CSM seat growth.
2. Sector-Wide Software and Cybersecurity Sell-Off
Software and cybersecurity stocks plunged, with Qualys down 13% and Cloudflare, Tenable and Zscaler each off about 11%, as fears mounted that advanced AI tools could reveal security flaws in legacy systems. ServiceNow shares extended losses alongside peers like Oracle, Salesforce and Palantir during the downturn.