15 Software Stocks With the Highest Upside Potential

9. ServiceNow, Inc. (NYSE:NOW)

Potential Upside: 57.97%

Number of Hedge Fund Holders: 104

According to Piper Sandler’s January 5, 2026, outlook for Security and Infrastructure Software stocks, the stock is among the firm’s top 5 picks for 2026. Analyst Rob Owens and his team said that we remain cautiously optimistic for 2026, as many companies are well-positioned to emerge as long-term GenAI winners and are at attractive valuations.

The team of analysts highlighted that the primary reason behind the drop in valuation is growing investor concern over the sustainability of growth. This is driven by potential headwinds from seat-count trends affecting the business model, slower-than-expected AI rollouts, and challenges in key verticals, such as the Fed, that appear to be structural rather than cyclical.

Rob Owens and his team commented:

”Due to recent M&A as well as speculation regarding GenAI disruption, NOW has slipped to ~29x EV / NTM FCF, close to the lowest valuation we have seen for the company over the last five years (which was ~25x at the end of ’22).”

However, on January 5, the financial services firm lowered its price target on the shares from $230 to $200 while reiterating a Buy rating. The revised price target offers a further 47.6% upside from the current levels.

ServiceNow, Inc. (NYSE:NOW) operates as a provider of cloud-based solutions for digital workflows worldwide. It operates an AI platform known as the Now platform. The company serves financial services, manufacturing, technology,  healthcare & life science, Public Sector, Telecom sectors, and other markets.