What Happened?
Shares of enterprise workflow automation company ServiceNow (NYSE: NOW) jumped 4.3% in the morning session after Nvidia CEO Jensen Huang dismissed fears that artificial intelligence would cannibalize the enterprise software sector.
High-growth names like Zscaler (ZS) and CrowdStrike (CRWD) saw significant rebounds as investors reassessed the "AI headwind" narrative that had previously weighed on valuations. Huang's comments acted as a powerful catalyst, signaling that the intersection of generative AI and established software platforms is a symbiotic relationship rather than a zero-sum game. During a CNBC appearance, Huang argued that the market "got it wrong," specifically defending the indispensable role of platforms like ServiceNow. He emphasized that these companies are uniquely positioned to deploy fine-tuned AI agents that utilize their existing specialized tools.
After the initial pop the shares cooled down to $108.01, up 4.2% from previous close.
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What Is The Market Telling Us
ServiceNow’s shares are somewhat volatile and have had 13 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 17 days ago when the stock gained 3.3% on the news that analysts suggested that the recent "SaaSpocalypse" sell-off had pushed valuations into deeply oversold territory, sparking a wave of opportunistic buying. While the sector had been hammered in early 2026 by fears that autonomous AI agents would replace traditional seat-based subscriptions, institutional investors began rotating back into "sticky" incumbents. This shift was fueled by a Barclays report arguing that corporate transitions away from legacy systems take years, not weeks, providing a protective moat for established providers in compliance and governance.
ServiceNow is down 26.8% since the beginning of the year, and at $108.01 per share, it is trading 48.3% below its 52-week high of $208.94 from July 2025. Investors who bought $1,000 worth of ServiceNow’s shares 5 years ago would now be looking at an investment worth $1,012.
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