Goldman Sachs has added ServiceNow (NOW) to its prestigious Conviction List, signaling strong confidence in the software company’s strategic direction. The bank’s analysts position the platform as a primary beneficiary of the ongoing integration of artificial intelligence into global corporate operations, pointing to robust quarterly performance and significant acquisition activity as foundations for future growth.
Financial Performance and Strategic Confidence
The optimistic stance from Goldman Sachs is supported by ServiceNow’s recent financial results. For the fourth quarter of 2025, the company reported total revenue reaching $3.57 billion. Subscription revenue, a critical metric, saw a 21 percent year-over-year increase. An impressive renewal rate of 98 percent underscores the platform’s deeply entrenched position within customers’ IT infrastructures.
Looking ahead, management has provided guidance for subscription revenues in the full year 2026, forecasting a range between $15.53 billion and $15.57 billion. The company also anticipates a free-cash-flow margin of 36 percent for the current year, a expectation reinforced by the recent authorization of a new $5 billion share repurchase program.
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Artificial Intelligence as a Core Growth Driver
Analyst Steven Kron and his team at Goldman Sachs project that ServiceNow can achieve approximately 20 percent annual organic growth through 2029. They view the company as a central hub for embedding AI applications directly into business workflows. Strategic collaborations with industry leaders like OpenAI and Anthropic are expected to make access to cutting-edge large language models a standard offering for enterprise clients. The full integration of these new AI technologies into ServiceNow’s existing architecture is slated for completion in the first half of 2026, with the next set of quarterly results likely to be presented on April 22.
Major Acquisition to Bolster Security Capabilities
In a move to broaden its technological foundation, ServiceNow has agreed to acquire the startup Armis for $7.75 billion. This transaction marks the largest acquisition in the company’s history and is primarily aimed at enhancing its cybersecurity capabilities. This strategic expansion is seen as a key initiative to solidify ServiceNow’s competitive position against other software rivals.
Current Market Position
On the trading floor, ServiceNow shares are currently priced at 12.90 euros. This level places the stock just above its 200-day moving average of 12.84 euros. Year-to-date, the equity has recorded a decline of roughly eleven percent.
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