Is ServiceNow the Biggest AI Winner Nobody Is Talking About?

Artificial intelligence (AI) was supposed to be bad news for ServiceNow (NYSE: NOW). When AI agents burst onto the scene, some investors worried businesses would no longer need traditional workflow software. Why pay for expensive software subscriptions if AI could automate tasks and build workflows on its own?

That concern helped fuel a sell-off across many software stocks earlier this year. Yet the opposite may be happening. Instead of replacing ServiceNow, AI could make the company's platform even more important. As businesses deploy more AI tools, they still need a way to manage, monitor, and coordinate all the work those systems create.

That is where ServiceNow comes in.

Image source: Getty Images.

ServiceNow already owns a critical layer of the enterprise

To understand the opportunity, investors first need to understand what ServiceNow actually does. Imagine a company with 50,000 employees. New hires need laptops. Managers need to approve expenses. Human resources teams need to onboard workers. Security teams need to respond to cyber threats. Customer service representatives need help resolving issues.

Every one of those activities involves a workflow. Historically, employees handled many of these processes through emails, spreadsheets, phone calls, and disconnected software systems. The result was often slow, inefficient, and difficult to track.

ServiceNow helps automate those workflows. Instead of manually moving requests from one department to another, the platform routes tasks automatically and ensures the right people receive the right information at the right time.

That may not sound exciting, but it has become incredibly valuable. Once a large organization builds hundreds or even thousands of workflows inside ServiceNow, replacing the platform becomes difficult, expensive, and disruptive. As a result, customers tend to stay for years and often expand their spending over time by adding new products and capabilities.

Those dynamics have helped ServiceNow become one of the most successful enterprise software companies in the world.

AI may strengthen the company's position

The next phase of the company's growth story revolves around AI. Many investors assume AI agents will reduce the need for workflow software. However, AI may actually create more demand for it.

Consider a simple example. Imagine an AI agent discovers that a manufacturing facility is running low on critical inventory. The AI agent can identify the issue. It can recommend a solution. It may even generate a purchase request.

But someone still needs to approve the spending. Someone needs to notify suppliers. Someone needs to update inventory systems. Every action must be documented and tracked. In other words, the AI agent can work on our behalf, but the organization still needs a workflow to manage that work.

This is exactly the opportunity ServiceNow is pursuing. The company has introduced AI-powered assistants, AI agents, and governance tools designed to help businesses manage both human employees and AI systems from a single platform. Together, these tools act as the AI Control Tower for companies.

Management's early results suggest customers are embracing that vision. ServiceNow reported that AI-related products such as Now Assist continued to gain traction, with Now Assist's net new annual contract value more than doubling year over year in the fourth quarter of 2025. It also delivered a solid 21% revenue growth in 2025, suggesting that the demand for its tools remains strong.

Longer-term, if ServiceNow executes its strategy, AI could become an opportunity for expansion rather than a threat of disruption.

Investors should still watch the risks

Of course, it's still early days in the AI race. Technology companies are racing to build increasingly capable AI systems. Some investors believe future AI agents could automate far more of companies' workflows than companies expect today. If that happens, the demand for ServiceNow's tools may fall.

Competition also remains intense in enterprise software, as both existing and new AI-native start-ups aim to capture ServiceNow's market share. The silver lining is that the company starts from a position of strength. Its software is deeply embedded in many of the world's largest organizations, giving it a significant advantage as customers seek ways to deploy AI responsibly.

What does it mean for investors?

Most investors think about AI through the lens of chipmakers and model builders. Those companies are important. But they represent only one layer of the AI ecosystem. Businesses also need infrastructure to organize, govern, and coordinate the work AI systems produce. And that's what ServiceNow is trying to provide.

As companies deploy more AI agents across their operations, the challenge may not be creating intelligence. It may be managing it. If that proves true, ServiceNow could emerge as one of the most important enterprise AI companies in the market -- even if it rarely receives the same attention as the industry's biggest names.

Lawrence Nga 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.