1 Stock-Split Stock to Buy That Could Soar
Key Points
ServiceNow completed a 5-for-1 stock split in December.
The software provider is poised for strong growth if enterprise AI adoption continues to soar.
- 10 stocks we like better than ServiceNow ›
Forward stock splits are a great opportunity for individual investors to buy whole shares of stocks that previously may have seemed out of their price range. For example, a stock trading at $2,000 per share would be available for $200 per share after a 10-for-1 forward stock split.
ServiceNow (NYSE: NOW) was one of several high-profile stock splits in 2025. After a 5-for-1 forward stock split in December, the stock now trades around $138 per share, as of this writing. Here's why that could be a golden opportunity to scoop up shares of an enterprise software provider that's poised to soar.
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ServiceNow is putting AI to work
ServiceNow provides a cloud-based platform that helps large organizations automate workflows and streamline operations across IT, customer service, HR, finance, and security. Some 8,400 global customers use ServiceNow's AI-powered software platform, including over 85% of the Fortune 500.
"Exceptional" and "stunning" were two of the superlatives management used to describe ServiceNow's third quarter.Total revenue on a generally accepted accounting principles (GAAP) basis grew 22% to $3.4 billion. The bulk of that revenue came from subscriptions, which increased 21.5%, compared to the year-ago period, exceeding the high end of the company's guidance.
As businesses implement various artificial intelligence (AI) tools to drive productivity and efficiency gains, ServiceNow's AI-enabled platform can integrate and orchestrate those tools, much like a control tower. According to CEO Bill McDermott, companies in every industry are clamoring for this "real-time AI control tower." As of Q3, the company's AI products were on pace to generate more than $500 million in annual contract value for 2025, marking significant progress toward its $1 billion AI target for 2026.
Enterprise IT spending on AI products is projected to reach $1.3 trillion by 2029, and businesses need ServiceNow's software to seamlessly integrate those AI tools into their daily operations. At a forward price-to-earnings ratio (P/E) of 33.9, ServiceNow isn't exactly cheap. However, if enterprise AI adoption continues to soar, ServiceNow's growth story could be in the early innings.
Should you buy stock in ServiceNow right now?
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Josh Cable has positions in ServiceNow. The Motley Fool has positions in and recommends ServiceNow. The Motley Fool has a disclosure policy.
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