ServiceNow shares slump nearly 18% premarket, on track for record drop

what happened

ServiceNow shares (NOW) fell nearly 18% in Thursday's premarket trading, to $123.21. If the decline holds through the session, it would be the largest percentage drop on record for the stock, according to Dow Jones Market Data.

The company reported third-quarter revenue of $4.106 billion, up 20.5% year on year and above the $4.095 billion consensus cited by FactSet. Earnings per share came in at $1, below the $1.02 analysts expected. Current remaining performance obligations rose 20.5% to $13.65 billion, but the company expects growth to slow to 18.5% in the fourth quarter. Its subscription revenue target of $4.245 billion to $4.255 billion sits at the lower end of forecasts.

Analysts are split. Goldman Sachs, led by Gabriela Borges, said next year will be a key test of whether the company can benefit from AI spending. JPMorgan, led by Samik Chatterjee, called the results “a bit noisy” and expects the gap between cRPO and revenue growth to narrow over time, raising its 2027 price target from $150 to $160.

why it matters

The market is focusing on slowing growth at a time when expectations for AI-driven demand are high. The sell-off shows investors are weighing future contract momentum, not just current revenue, which could weigh on sentiment across software stocks.

market impact

ServiceNow shares: earnings miss and weaker outlook pressure the stock

• ▼ServiceNow shares pressure down — earnings below forecast and slower cRPO growth guided for Q4

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