Why ServiceNow Stock Is Plunging Today
Key Points
UBS reduced its price target on ServiceNow stock.
ServiceNow projects growth on two important metrics in 2026, suggesting that investors shouldn't rush to click the sell button.
- 10 stocks we like better than ServiceNow ›
The first full week of April trading hasn't been kind to ServiceNow (NYSE: NOW). Closing at $102.42 on Monday, shares of the software-as-a-service (SaaS) stock subsequently closed lower on each day of trading through Thursday. And the trend seems likely to continue today. A firm tempered its expectations for ServiceNow stock, and investors are responding by trimming their positions.
As of 2:55 p.m. ET, shares of ServiceNow stock are down 7.1%.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Image source: Getty Images.
Winnowing confidence in the company leads to a sharply lowered price target
UBS is no longer as bullish on ServiceNow's prospects as it was a couple of days ago. Last night, UBS downgraded ServiceNow stock to neutral from buy and slashed its price target to $100 from $170. Based on shares closing at $89.81 yesterday, the new UBS price target implies upside of 11%.
According to Thefly.com, UBS lowered its expectations for ServiceNow stock because it's less sure the company is in a more advantageous position to benefit from the AI computing boom than its software peers. Moreover, UBS doesn't foresee the company surpassing analysts' expectations in the upcoming quarters as convincingly as it had done in the past.
Should ServiceNow investors be running for the exits now?
While it may be disconcerting for investors to find that UBS reduced its expectations for ServiceNow stock, they must keep their emotions in check. The opinions of UBS are, well, exactly that -- opinions, not facts.
Investors would be wise to remember that, in 2026, ServiceNow projects subscription revenue growth of more than 20% year over year. Plus, the company, one of the leading SaaS stocks available to investors, forecasts a 2026 free cash flow margin of 36% -- an improvement over the 31.5% and 35% margins it reported in 2024 and 2025, respectively. For those with ServiceNow stock in their portfolios, the best approach now is to remain calm and continue monitoring the company's financial results for any warning flags.
Should you buy stock in ServiceNow right now?
Before you buy stock in ServiceNow, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and ServiceNow wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $550,348!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,127,467!*
Now, it’s worth noting Stock Advisor’s total average return is 959% — a market-crushing outperformance compared to 191% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of April 10, 2026.
Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ServiceNow. The Motley Fool has a disclosure policy.
Recommended Articles
