NOW Stock Has Rebounded Over 54% — Why ServiceNow’s Rally Could Have Further Room to Run

After underperforming in the first half of the year, ServiceNow (NOW) stock has staged a strong recovery, rising 57.4% from its low of $81.24.

The sell-off was driven largely by a broader shift in investor sentiment toward enterprise software stocks. As artificial intelligence (AI) reshapes the software industry, investors have grown concerned that AI-powered agents could disrupt traditional software vendors. These concerns triggered widespread selling across the sector, including ServiceNow.

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Margin pressure also weighed on the shares, adding to concerns about the company's near-term profitability.

However, ServiceNow's underlying business momentum remains strong. Rising subscription revenue and an upbeat outlook suggest that the company is leveraging AI to accelerate its growth. Further, ServiceNow's expanding customer base and larger deals support its growth case.