What Happened?
Shares of enterprise workflow automation company ServiceNow (NYSE: NOW) fell 9.4% in the afternoon session after UBS analysts downgraded the stock from "Buy" to "Neutral" and lowered its price target to $100.
The analysts expressed concerns regarding ServiceNow's competitive edge as businesses shift their budgets away from traditional software and toward new AI tools.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy ServiceNow? Access our full analysis report here, it’s free.
What Is The Market Telling Us
ServiceNow’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock dropped 6.7% on the news that reports of a ceasefire breach in the Middle East spiked market volatility as fears grew that a fragile U.S.-Iran truce would unravel.
This tension was compounded by Anthropic’s launch of Managed Agents, autonomous AI systems that execute complex tasks. Traders were worried these would disrupt the traditional SaaS (Software as a Service) model, by replacing human-operated tools with more efficient AI workers. The sell-off intensified after short seller Michael Burry claimed (in a deleted social media post) Anthropic was "eating Palantir’s lunch." Burry’s comments highlighted the vulnerability of legacy platforms to Anthropic’s AI solutions.
ServiceNow is down 44.3% since the beginning of the year, and at $82.10 per share, it is trading 60.7% below its 52-week high of $208.94 from July 2025. Investors who bought $1,000 worth of ServiceNow’s shares 5 years ago would now be looking at only $764.56.
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