I believe $ServiceNow(NOW)$ offers one of the clearest “AI × workflow” investment stories in enterprise software today. Here’s my deep-dive from the latest Q2 results through market positioning, technicals, valuation, and risks.
Q2 2025: Proof of AI-Driven Growth
When ServiceNow reported Q2 2025 results on July 23, I saw three numbers jump off the page:
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Revenue: $3.22 billion, up 22.5% YoY (consensus $3.12 B)
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Subscription revenue: $3.11 B, +22.5% YoY
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Adjusted EPS: $4.09 (beat by $0.52)
Beyond the beat, I’m struck by the 30% growth in customers with >$20 million ARR and the 50% sequential jump in AI-related deals that CEO Bill McDermott highlighted. Those metrics tell me ServiceNow is more than a workflow automation play, it’s morphing into an AI-first platform, embedding generative and “agentic” AI into every enterprise process.
AI & “Agentic Workflows”: Why I’m Bullish
I’ve followed ServiceNow’s pivot into AI for over a year, and Q2 solidified my view that “agentic workflows”—where the system not only automates tasks but reasons, suggests, and executes—are the next frontier. Internally, ServiceNow is even using its own AI to cut $100 million in planned headcount costs by year-end, underlining that AI isn’t just a product, it’s a profit lever.
Market Position & Guidance Raise
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Remaining Performance Obligations (RPO): $10.92 billion, up YoY
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Full-year subscription guidance raised to $12.775–$12.795 billion (from $12.64–12.68 B)
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Q3 subscription outlook: $3.26–$3.265 B (consensus $3.21 B)
Those guide-ups tell me the leadership team sees sustained demand for AI-powered service management and they’re willing to back it up with higher targets.
Technical Setup
NOW Daily Chart
From my chart work on NOW:
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Key support: $900 (round-number floor)
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Immediate resistance: $950–$960
I’d look to add on any dip into $870–$900 as my opinion is this support level will hold and price will bounce back around this level. If this level fails to hold, the next strong support level is around 824-834, where the price will fill the gap. The trade idea will be aiming to profit from the bounce that I expect to happen after this recent price fall.
Identifying the risks
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Macro slowdowns in IT budgets could pressure renewal rates.
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Execution on AI roadmap is important. If “agentic” features disappoint, the stock could give back gains.
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Valuation sensitivity risk is out there. With 22× sales, any guidance miss can trigger a sharp pullback.
In my view, the risk of a multiple compression feels offset by the upside from continued AI deal growth and guide-ups.
Why I like ServiceNow now: Q2 beat & raise, AI-led momentum, and a clean technical setup all line up for me. If ServiceNow keeps delivering on its “agentic AI” promise and continued guide-ups, I believe it can grow into its premium multiple, making NOW one of my top enterprise-AI picks as we head into Q3.
I would love to hear your thoughts as well, so feel free to comment your thoughts! [Grin]
@MillionaireTiger @Tiger_comments @Daily_Discussion @CaptainTiger @TigerSG
Disclaimer: This is a general analysis and not financial advice. Always conduct your own research before making any investment decisions.
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