1 Incredible Artificial Intelligence (AI) Stock to Buy After Its Post-Earnings Sell-Off

Software stocks person been nether unit successful 2026 amid fears that artificial quality (AI) volition trim request for endeavor bundle done a operation of agentic task completion and full-on displacement by generative AI-based apps.

ServiceNow (NYSE: NOW) -- a starring software-as-a-service (SaaS) solution for IT work management, HR, lawsuit service, and much -- adjacent admitted that its ain AI tools volition pb to less users implicit clip astatine its caller expert day. And contempt absorption sharing first-quarter results that bushed its outlook connected some the apical and bottommost lines, investors sold disconnected the banal implicit fears astir the business’s aboriginal growth.

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Despite the market’s concerns astir the company, the stock's semipermanent outlook remains strong, and it could beryllium a large concern accidental close now.

Is ServiceNow a bully banal to bargain close now?

ServiceNow grew subscription gross by 19% twelvemonth implicit twelvemonth successful the archetypal quarter, prompting absorption to somewhat rise its full-year guidance. But immoderate analysts were acrophobic astir however ServiceNow generates gross growth.

The company’s apical enactment benefited from 3 acquisitions past quarter: MoveWorks, Veza, and Pyramid. The second 2 acquisitions closed successful March and had a constricted interaction connected the apical line. The institution did, however, payment from MoveWorks passim the full quarter, but its interaction would’ve been baked into management’s guidance.

However, absorption closed its acquisition of Armis earlier than anticipated successful April, which could person led to an summation successful full-year guidance. Management dismissed the conception during the net telephone and noted beardown integrated gross growth.

Remaining show work maturation was again beardown successful the archetypal quarter, climbing 25% twelvemonth implicit year. That’s successful enactment with its maturation from the archetypal 4th of 2025, and the institution present has a backlog of $27.7 billion, of which $12.6 cardinal volition beryllium realized implicit the adjacent 12 months.

At ServiceNow’s expert day, absorption outlined its way toward $30 cardinal successful subscription revenue, up from $12.8 cardinal successful 2025, and provided guidance for $15.7 cardinal successful 2026. That maturation volition beryllium driven by Now Assist, its AI solution, which it expects to scope 30% of yearly declaration value, up from astir 10% this year. Furthermore, it expects to make a Rule of 40 people supra 60 that year, indicating beardown operating borderline enlargement arsenic it scales.