Shares of ServiceNow surged 6.17% to MXN 2,170.00 on August 19, 2026, after two of Wall Street's heaviest hitters raised their price targets on the enterprise software giant, signaling growing confidence that the company's push into artificial intelligence is translating into real revenue. Two Wall Street Giants Just Raised Their Bets on ServiceNow — But at 73x Earnings, How Much Upside Is Left?
Shares of ServiceNow jumped 6.17% to MXN 2,170.00 on August 19 after BofA Securities and Wells Fargo both lifted their price targets on the enterprise software maker, adding fuel to a stock that has staged a dramatic recovery from its 2026 lows. Wells Fargo raised its target to $175 from $160 while maintaining its Overweight (bullish) rating , and BofA hiked to $150 from $130. The moves arrive against a favorable macro backdrop, with Treasury yields falling ahead of the Federal Reserve minutes release, giving tech stocks room to run.
A Blockbuster Quarter Gave Analysts the Cover to Get More Bullish. ServiceNow's Q2 2026 results beat every guidance metric: subscription revenue hit $3.877 billion (23% year-over-year growth, 150 basis points above guidance), while operating margin reached 29.5%, a full three percentage points above the company's own forecast.
Management raised full-year 2026 subscription revenue guidance to $15.76–$15.78 billion, roughly 22.5% growth. When a company this large consistently outpaces its own projections, it signals to investors that demand is accelerating, not plateauing.
AI Is Becoming Real Revenue, Not Just a Talking Point. ServiceNow's AI-related annual contract value — the yearly revenue locked in from AI-powered products — surpassed $1 billion, with new AI deal growth accelerating over 40% quarter over quarter.
Management expects this figure to reach $1.5 billion by year-end 2026. That trajectory is precisely what turned BofA bullish earlier this year: the firm argued AI is "the strongest tailwind ServiceNow has ever seen, not an existential threat."
The Valuation Still Demands a Leap of Faith. ServiceNow trades at roughly 73.5x earnings , a steep premium that requires continued flawless execution. Subscription gross margins are guided at 81% for the full year, down 250 basis points from 2025, reflecting the cost of cloud partnerships and AI infrastructure.
There is short-term pressure on profitability as the company pours money into AI capabilities. Even with Wells Fargo's $175 target — the higher of the two upgrades — shares would need to climb roughly 49% from today's NYSE close near $117.72.
The Consensus Says Buy, but the Range Is Wide. Across 49 analysts, ServiceNow carries a "Strong Buy" consensus with an average target of $140.25 — but targets span from $72 to $248 , reflecting deep disagreement over whether AI spending translates into durable profit growth or merely inflates costs. Shareholders are betting the former. The next quarter will test that conviction.