ServiceNow Has to Sell the Same AI Technology That Could Replace It. Here's Why the Stock Is Down Nearly 50%.
2026-04-01 22:25:00 ET
ServiceNow 's (NYSE: NOW) stock has been cut nearly in half since last summer, swept up in a sell-off across software stocks driven by the rise of artificial intelligence (AI). That's a steep decline for a company that doubled free cash flow (FCF) over the past three years and is embedded inside most of the Fortune 500 companies. At roughly 26 times trailing FCF, it's the cheapest the stock has been in years as advancing technology begins to threaten its moat and the economics of ServiceNow's highly profitable business model.
The company built the plumbing that big companies use to run their operations, routing work requests, tracking completion, and managing handoffs between departments. Underneath all of it sits a single system of record that controls access to critical functions across the organization. Replacing that configuration takes years of work, and those switching costs are why 98% of customers renew.
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