ServiceNow's stock plummets 46% despite record AI and revenue growth
ServiceNow has faced a challenging year in the stock market today, with its share price falling by roughly 46% over the past 12 months. Despite this decline, the company continues to show strong business growth, particularly in high-value contracts and AI-driven deals. Investors are now taking notice, with some major firms increasing their stakes in the tech company.
The company's financial performance in Q4 2024 revealed a 19.5% year-over-year increase in subscription revenue, reaching $3.466 billion. Alongside this, the number of clients generating over $20 million in annual contract value rose by more than 30% compared to the previous year. Customer loyalty also remained high, with a renewal rate of 98%.
ServiceNow's AI division, Now Assist, saw significant momentum, tripling the number of new deals worth over $1 million from the prior quarter. This growth has led analysts at Wedbush to include the company in their 'AI 30' list, highlighting confidence in its AI strategy.
Despite the company's strong operational results, its market capitalisation has dropped by about 50.19% since its peak in June 2023. Recent market downturns in 2025 and 2026, including a 27.75% decline in 2025 and a further 30.49% drop so far in 2026, have contributed to this fall. The past month alone saw a sharp 29.53% decrease, with high trading volumes indicating volatility.
Amid this downturn, Renaissance Group, a quantitative hedge fund, has quadrupled its stake in ServiceNow. The move appears to be a contrarian bet, possibly anticipating a rebound in tech valuations. The firm has also expanded its positions in Netflix and Lam Research. Meanwhile, Goldman Sachs remains optimistic, forecasting 20% annual growth for ServiceNow through 2029 and adding the stock to its 'US Conviction List'.
ServiceNow's share price has struggled over the past year in the stock market today, yet its core business metrics remain robust. The company's AI division is gaining traction, and major investors are increasing their exposure. Analysts continue to project long-term growth, suggesting confidence in its future performance.
