**ServiceNow (NOW)** shares have dropped 31.7% year-to-date, significantly underperforming the Zacks Computer and Technology sector, which has declined by 7.5%. This downturn is attributed to macroeconomic challenges, currency fluctuations, and fierce competition from rivals like Microsoft, Oracle, and Salesforce, which have experienced declines of 23.5%, 24.5%, and 29.5%, respectively. A transition from self-hosted to hosted solutions is expected to impact subscription revenue growth by around 150 basis points in Q1 2026.
In response, ServiceNow has raised its subscription revenue guidance for 2026 to between $15.53 billion and $15.57 billion, indicating a growth rate of 19.5-20% on a non-GAAP constant currency basis. However, this marks a slowdown compared to the 20.5% growth reported in 2025. The company aims to expand its total addressable market from approximately $90 billion to $600 billion through acquisitions and partnerships, further enhancing its AI capabilities. As of 2025, ServiceNow served over 8,800 global customers, including over 85% of the Fortune 500, and reported a 98% customer renewal rate, reflecting its strong foothold in the enterprise cloud solutions market.
