ServiceNow Braces for Earnings as Security Flaw and Salesforce’s Agentforce Threat Loom

ServiceNow faces a critical security vulnerability and rising competition from Salesforce's Agentforce as it prepares to report Q2 results, with analysts split and insiders selling.

ServiceNow will report second-quarter results after the US market close on July 22, and the numbers arrive with an unusual amount of static in the air. The software group faces a freshly patched security vulnerability that compromised customer instances, while Salesforce CEO Marc Benioff has been publicly – and privately – targeting its core IT-service-management turf with a new AI platform called Agentforce. For a stock that has bounced 8.57% over the past month but slipped 0.79% to €90.20 on Friday, the earnings call has become a moment of truth on multiple fronts.

The verbal war between the two CEOs is more than noise because Salesforce is beginning to land actual client wins. Agentforce IT Service, just six months old, has registered 200 customers. That is a sliver of ServiceNow’s 8,600 ITSM clients and 40% market share – six times the combined share of its next two rivals, BMC Helix and Atlassian. Yet defections from known names such as CoolSys and Sunrun, which have publicly replaced ServiceNow with Agentforce, give the threat a tangible edge. “We are definitely taking customers away from ServiceNow,” Kishan Chetan, Salesforce’s EVP and GM for Agentforce, told reporters, pegging the total ITSM opportunity at $50 billion.

ServiceNow’s own troubles go beyond competition. The company disclosed a critical security flaw that allowed unauthorised access to customer instances. Attackers exploited the vulnerability on the Australia platform version and older releases combined with specific configuration changes. A security update has been issued, but the incident is expected to feature prominently in the earnings conference call as investors gauge whether customer trust has been dented.

Institutional investors are already voting with their feet. Avalon Trust slashed its stake by 98.7% to just 1,426 shares in the first quarter, and Clearstead Trust cut by 97.3% to 533 shares. On the other side, Financiere des Professionnels boosted its position by 1,700% to 22,950 shares worth $2.4 million, while Assetmark increased its holding by 15.9% to 306,385 shares valued at roughly $32 million. Overall, institutions still own 87.18% of the stock. Insiders have also been sellers: director Anita Sands sold 16,445 shares at $90.14 in mid-May, director Paul Chamberlain 1,500 shares at $87.23, and Jacqueline Canney 8,927 shares at $89.60 in April.

Analyst opinions span an unusually wide range. Goldman Sachs rates the stock a buy with a $145 target, HSBC sets $171 as a buy, Raymond James and RBC both have outperform ratings at $130, and Needham recommends buy at $115. At the bearish end, KeyCorp calls it underweight with an $85 target, while Capital One has an overweight rating at $120. The consensus blends to a moderate buy with a mean target of $141.03. A separate compilation in euros puts the average target at €123.26, reflecting the currency translation and a slightly different analyst set.

The bull case rests on structural advantages that have survived every previous Salesforce assault. ServiceNow’s subscription revenue grew 19% year-over-year in the first quarter to $3.671 billion, and the company lifted its 2026 AI products revenue target from $1 billion to $1.5 billion. The sheer scale – 8,600 customers and a dominant share of a mature market – suggests that even if Salesforce chips away at the edges, the core franchise should hold. “Unhinged,” ServiceNow CEO Bill McDermott called Benioff’s attacks, a dismissive label that echoes past failed Salesforce forays into ITSM.

The bear case is more insidious: a gradual erosion of pricing power over multiple renewal cycles. The annualised 30-day volatility of 56.11% shows the market already pricing in a wide range of outcomes. Any disappointment in subscription growth, remaining performance obligations (RPO), or management commentary on competitive dynamics could trigger an outsized sell-off rather than a modest pullback.

The upcoming report will test whether the AI narrative can override the security and competitive headwinds. With analyst targets stretching from $85 to $171 and the stock sitting near €90, the July 22 earnings call is not just a quarterly update – it is a referendum on whether ServiceNow’s moat is as wide as it has long claimed.