ServiceNow's Institutional Buying Surge Collides with Shareholder-Approved Dilution

Shareholders approved a 38M-share equity expansion while Fisher Asset Management boosted its stake by 404%. Stock down 32% YTD, but BofA initiates Buy with $130 target.

A curious tension has enveloped ServiceNow in recent weeks. While a cluster of major institutional investors have been ramping up their stakes at a pace rarely seen, the company’s own shareholders just voted to hand the board a powerful — and potentially dilutive — tool for compensating talent. The net picture is one of a software giant that remains deeply polarising even as it lays out an ambitious AI security roadmap.

The shareholder meeting on 21 May 2026 delivered a clear verdict on the stock plan. Of the roughly 767 million shares voted, some 736 million backed expanding the employee equity pool by 38 million shares, taking the total reserve to roughly 98 million. That leaves about 54 million shares available for future grants. The vote also re-elected all nine director nominees, though Zoom founder Eric S. Yuan received the weakest support with 594 million votes in favour against roughly 174 million withheld or opposed. Management compensation for 2025 passed, but with notable dissent: about 111 million shares voted against, representing roughly 14% of the total. A shareholder proposal to grant the right to act by written consent failed, with around 486 million shares opposed.

The meeting’s outcome directly fuels one of the most aggressive institutional buying sprees in the stock’s recent history. Fisher Asset Management stands out: the firm expanded its position by a staggering 404.3% to roughly 8.35 million shares, a holding valued at $1.28 billion and equal to a 0.80% stake. Several other money managers made similarly bold moves. Hantz Financial Services added 464.3%, taking its count to 140,396 shares. Nicola Wealth Management increased by 400% to 138,000 shares. EverSource Wealth Advisors and Coldstream Capital Management both boosted their positions by more than 400% and 600%, respectively. Overall, institutional ownership now sits at 87.18%.

Just a day after the vote, the stock rallied 2.45% to $102.13, trading in a range of $99.43 to $104.59 on volume of nearly 23.6 million shares. The bounce builds on a prior week’s gain of roughly 7.4%, though the broader trend remains punishing: the shares are down nearly 32% year-to-date and have shed almost 49% over the past twelve months.

Bank of America has chosen this moment to re-enter the narrative. The bank initiated coverage with a Buy rating and a $130 price target, arguing ServiceNow’s platform is becoming indispensable for managing and auditing enterprise AI workflows. Alongside the call, ServiceNow unveiled fresh partnerships with Experian and Boomi aimed at embedding data services directly into its AI agent infrastructure, with the goal of accelerating the use of autonomous agents in regulated processes.

Strategically, the company is leaning hard into identity and access management for AI agents — a push highlighted by the late-2025 acquisition of Veza. The broader theme is tackling “shadow agents”, or AI instances that operate without proper visibility or governance inside corporate IT environments. ServiceNow plans to showcase the security and compliance capabilities of its new OT Control Tower platform on 3 June 2026 in a joint webcast with EY.

The financial case for the stock still hinges on subscription growth. First-quarter subscription revenue reached $3.671 billion, up 22% year-over-year. Current remaining performance obligations (cRPO) stood at $12.64 billion, also rising 22%. The full-year outlook calls for subscription revenue between $15.735 billion and $15.775 billion. Delays in the Middle East clipped roughly 75 basis points of growth in the first quarter.

For all the institutional enthusiasm, the dilution question lingers. The expanded equity pool gives ServiceNow more firepower to retain engineers and product managers in the competitive AI labour market, but it also means current shareholders will see their ownership stakes slowly eroded. Whether the stock can climb back toward the $130 target will depend on how quickly the promise of AI security turns into billable demand.