ServiceNows AI Expansion: Can It Accelerate Subscription Growth Amidst Strong Competition?
ServiceNow (NOW) is expanding the use of AI-powered workflows across industries to support customer growth and boost subscription revenues. The company has been adding generative AI features across its key products to help enterprises automate services, follow compliance rules, and improve efficiency.
Expanding AI-Powered Workflows
Now Assist, a key product in the ServiceNow platform, continues to gain traction across various workflows. It is being used to accelerate case resolution, streamline service requests, and enable intelligent self-service across IT, employee, and customer workflows. The Pro Plus tier packages these capabilities into prebuilt modules, while RaptorDB enhances performance with higher throughput and faster analytics. These offerings contributed to 72 transactions of more than $1 million in net new Annual Contract Value in the first quarter of 2025, reflecting strong enterprise demand for AI-native workflows.
Expanding Partner Base
ServiceNow is benefiting from an expanding partner base as adoption expands across enterprise customers. Vodafone is implementing ServiceNow’s AI stack to modernize global service operations, while Aptiv is co-developing workflow solutions across industrial and automotive environments. Collaboration with Devoteam is supporting CRM transformation across Europe and the Middle East, helping enterprises digitize engagement at scale.
Competition from Salesforce and BigBear.ai
ServiceNow faces growing competition from Salesforce CRM and BigBear.ai, both of which are expanding their AI capabilities and platform reach across enterprise and public sector workflows. Salesforce is advancing its AI strategy with Einstein Copilot, a generative AI assistant embedded across sales, service, and support workflows. The assistant helps automate case resolutions, generate summaries, and streamline CRM interactions, directly overlapping with ServiceNow’s Now Assist, Pro Plus, and customer service offerings. Salesforce’s strong client base in front-office automation makes it a key competitor in AI-powered enterprise transformation.
BigBear.ai is focused on AI-driven decision intelligence and autonomous workflows, particularly in public sector and regulated environments. The company delivers mission-critical analytics and AI orchestration for defense, logistics, and national security operations. As ServiceNow expands sovereign cloud offerings like SPP-SG, BigBear.ai’s footprint in public workflows positions it as a direct challenger in government-focused AI deployment.
Share Price Performance and Valuation
ServiceNow’s shares have declined 7.5% year to date, while the broader Zacks Computer & Technology sector has increased 0.9% and the Computer-IT services industry has plunged 10.5%. ServiceNow stock is trading at a premium, with a forward 12-month Price/Sales of 14.34X compared with the industry’s 18.47X. NOW has a Value Score of F.
The Zacks Consensus Estimate for ServiceNow’s second-quarter 2025 earnings is pegged at $3.53 per share, unchanged over the past 30 days, indicating 12.78% year-over-year growth. The consensus mark for NOW’s 2025 earnings is pegged at $16.51 per share, which has remained unchanged over the past 30 days. The figure indicates an 18.61% increase year over year. ServiceNow currently carries a Zacks Rank #3 (Hold).
In conclusion, ServiceNow is expanding its AI-powered workflows across various industries to support customer growth and boost subscription revenues. However, the company faces stiff competition from Salesforce and BigBear.ai, both of which are expanding their AI capabilities and platform reach across enterprise and public sector workflows. ServiceNow’s share price performance and valuation indicate that the stock is trading at a premium compared to the industry average, but the company’s earnings estimates have remained unchanged over the past 30 days.
