ServiceNow’s stock has tumbled 37% over the roughly three-month period from late October through January, driven in large part by investor worries about AI disruption in the enterprise software market and a more cautious forward outlook. This steep pullback has overshadowed the company’s steady revenue growth, prompting questions about whether the recent correction represents a structural threat or a temporary valuation reset.

In its fourth quarter, ServiceNow reported $3.57 billion in revenue, marking 21% year-over-year growth, and delivered $0.92 in earnings per share, comfortably above consensus estimates. Excluding its recently acquired businesses, organic revenue growth was 19%, just shy of the 20% threshold that many growth investors target. The company also reiterated its commitment to returning capital to shareholders through an active share repurchase program.

Shares currently trade at roughly 33 times trailing earnings, a multiple that ‘Mad Money’ host Jim Cramer has described as being under pressure from a broader reassessment of price-to-earnings ratios in the software sector. Investor unease has been amplified by ServiceNow’s aggressive acquisitions, including its $2.85 billion Moveworks purchase and the $7.75 billion Armis deal, raising questions about integration risk and the impact on long-term margin expansion. Management’s cautious guidance for fiscal 2026 has done little to reassure markets, even as high-quality growth names in the sector attract renewed buying interest.