ServiceNow’s AI Subscription Boom Lifts Stock Above Key Support, Even as Governance Votes Raise Eyebrows

ServiceNow shares rebounded sharply last week, closing at $102.13 on Friday after a volatile week that saw the stock surge nearly 9% on Monday alone. The gain snapped a stretch of weakness and pushed the price back into a technical support zone that analysts say could determine whether the recovery has legs.

The catalyst? A surge in demand for the company’s Now Assist AI platform. Customers paying more than $1 million annually for the tool grew by over 130% in the first quarter. That figure, disclosed in April’s earnings, is now driving the narrative around the stock as investors reassess the impact of automation on enterprise software.

A Week of Sharp Swings and Strong Momentum

The week opened with a bang. After finishing the prior Friday at $95.07, ServiceNow accelerated 8.78% on Monday, hitting an intraday high of $104.68. The rally continued Tuesday with a peak of $110.83 before pulling back to a Thursday low of $98.11. The weekly gain settled at roughly 7.4%, and the short-term technical picture turned constructive: the 5-day moving average landed at $102.06, the 50-day at $98.11, and the 14-day RSI clocked in at 57.27 — neutral with a slightly bullish tilt.

The support zone between $94.71 and $104.67 held firm. Now the question is whether the stock can clear the $104 to $105 resistance level. A clean break above that would put last Tuesday’s high of $110.83 back in play.

Shareholders Back a Bigger Option Pool, but Grumble on Governance

At the annual meeting on May 21, investors approved all six agenda items, including a significant expansion of the equity incentive plan. The company will add 38 million shares to the pool earmarked for employee stock options — a move designed to retain top talent in the fiercely competitive software labour market.

A shareholder proposal to allow voting by written consent was soundly rejected, with 486 million votes against versus 281 million in favour. The compensation package for the executive team passed, though shareholders will now review top pay on an annual basis.

Should investors sell immediately? Or is it worth buying ServiceNow?

Director re-elections revealed some unease. Former CEO Bill McDermott secured 689 million votes in favour with 78 million against. Zoom CEO Eric Yuan drew a starker split: 594 million for and 174 million against, signalling that not all investors are entirely comfortable with the board’s composition.

Quarterly Results Strengthen the Bull Case

The numbers from April paint a picture of steady growth. Subscription revenue rose 22% year-over-year to $3.67 billion in the first quarter, while total revenue reached $3.77 billion. Contracted revenue for the next twelve months climbed 22.5% to $12.64 billion, and management lifted the full-year revenue forecast.

For fiscal 2026, the company is targeting subscription revenue of $15.74 billion — another 22% increase — along with an operating margin of 31.5% and free-cash-flow margin of 35%.

Wall Street Divided, but Institutions Stay Put

The average analyst price target sits near $142, according to market data. Truist Financial sees fair value at $120, while UBS is more cautious at $100. BofA Global Research rates ServiceNow a “buy,” contrasting it with Salesforce, which it rates “underperform.”

Institutional investors remain heavily committed, holding more than 87% of shares outstanding. The company is also expanding its AI capabilities through an enhanced partnership with Amazon Web Services, aimed at delivering new tools for AI management.

Falling bond yields provided a tailwind for the entire software sector last week, but ServiceNow’s own fundamentals — particularly the explosive growth in high-value AI contracts — are what ultimately lifted the stock above its technical floor. Whether that floor now becomes a springboard depends on the next few sessions.