ServiceNow’s AI Thesis Faces Its Next Big Test as Jefferies Conference Nears

Bank of America and Bernstein upgrade ServiceNow on AI operating layer thesis; Q1 revenue jumps 22%, RPO hits $12.64B, and Experian partnership signals real-world AI adoption.

The calendar is marked. On May 27, ServiceNow takes the stage at Jefferies’ Software, Internet & AI Conference, and for a stock that has clawed back 17.6% from its post-earnings lows, the stakes are clear. The market wants proof that the company’s artificial-intelligence push is more than slide?deck promises — that autonomous agents are actually generating revenue, not just buzz.

Recent analyst calls have already tilted the narrative in the bulls’ favour. Bank of America reignited the debate on Monday by reinstating coverage with a “Buy” rating and a $130 price target. The stock surged 8.9% in a single afternoon session, with trading volume doubling to more than 50 million shares. Analyst Tal Liani directly challenged the so?called “SaaSpocalypse” fear that AI agents will eventually gut traditional workflow software. Instead, he argued that ServiceNow’s platform is becoming the underlying operating layer for enterprise AI, pointing to products such as the AI Control Tower and the Action Fabric, as well as the recent acquisitions of Armis and Veza. To underline the conviction, BofA simultaneously downgraded rival Salesforce to “Underperform” — a signal it sees the two companies on diverging paths.

Bernstein has gone even further. Analyst Peter Weed raised his price target to $236, the highest on the Street, and anointed ServiceNow a “full?stack AI operating layer” for large corporations. His long?range thesis leans on management’s 2030 ambition: $30 billion in subscription revenue, a Rule?of?40 score above 60, and stock?based compensation falling to less than 10% of revenue. Those targets are aggressive, but they rest on a foundation the company has already started to lay.

First?quarter results gave the bull case hard numbers. Revenue jumped 22% year over year to $3.77 billion, while remaining performance obligations hit $12.64 billion — the fifth consecutive quarter of RPO growth above 20%. The number of customers with an annual contract value above $1 million climbed by more than 130%. ServiceNow also raised its full?year subscription revenue guidance to a midpoint of $15.755 billion, an increase of $205 million from the prior outlook, and reiterated constant?currency growth of 20.5% to 21.0%.

For the current quarter, the company expects subscription revenue between $3.815 billion and $3.820 billion, with an operating margin around 26.5%. That margin figure will get a temporary squeeze from the early close of the Armis acquisition — a headwind management says will normalise in 2027. Geopolitical tensions, meanwhile, continue to delay some deals, but the pipeline of large AI?driven contracts is building. In Q1 alone, 16 transactions each contributed more than $5 million in net new annual contract value.

Real?world implementations are beginning to back up the rhetoric. In May, ServiceNow announced a global multi?year partnership with Experian, deploying autonomous AI agents for onboarding, third?party risk, and model governance. Similar deals with Accenture, FedEx Dataworks and Boomi have moved from pilot to production — a shift that analysts say matters far more than AI slogans.

Yet the stock still has a mountain to climb. At a close of $102.13 on May 22, it remains roughly 38% below where it started the year. The analyst consensus, based on 47 ratings from S&P Global, is a “Strong Buy” with a mean target of $143 — implying about 40% upside. But the range is unusually wide: from a low of $85 to Bernstein’s $236. That dispersion reflects how much of the valuation hinges on whether AI adoption becomes a revenue driver or a cost?saving substitute.

Technically, near?term moving averages have turned bullish, with short?term lines crossing above long?term ones. Support sits at $95.74 and $94.00. The breakout above the April lows has been sharp, but the software sector remains volatile, and the fundamental bar keeps rising.

When ServiceNow’s executives meet institutional investors on May 27, they will need to deliver two things: concrete evidence that AI deals are scaling profitably, and enough conviction in Q2 guidance to justify the recent rally. The market is leaning bullish — but it still wants proof that the AI story is real, not just a narrative.