Is NOW a good stock to buy? We came across a bullish thesis on ServiceNow, Inc. on CapexAndChill’s Substack. In this article, we will summarize the bulls’ thesis on NOW. ServiceNow, Inc.’s share was trading at $110.95 as of March 23rd. NOW’s trailing and forward P/E were 66.10 and 26.32 respectively according to Yahoo Finance.
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ServiceNow, Inc. provides cloud-based solution for digital workflows in the North America, Europe, the Middle East and Africa, Asia Pacific, and internationally. NOW is repositioning itself from a traditional seat-based SaaS vendor into the foundational infrastructure layer of the AI-driven enterprise, functioning as a unified platform that orchestrates workflows across IT, HR, and customer service through a single data model.
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While the prevailing market narrative assumes generative AI will reduce headcount and compress seat-based revenues, this view overlooks ServiceNow’s structural shift toward outcome-based monetization. Through Pro Plus pricing and its Assist Token model, the company is transitioning from charging per employee to charging per unit of work, effectively transforming software into a form of digital labor taxation.
This dual-layer pricing model introduces a SaaS “floor” through higher per-seat pricing, often with ~60% uplift, alongside a consumption-driven “ceiling” where AI usage scales dynamically. Even in flat or declining headcount environments, discount normalization and contract repricing ensure steady revenue expansion, while token consumption introduces exponential upside as AI-driven productivity increases workload throughput. Early customer data supports this model, with significant ROI driving rapid scaling in token usage, reinforcing a shift from linear to compounding revenue dynamics.
Beyond enterprise adoption, ServiceNow is capitalizing on a major public sector opportunity, embedding itself within U.S. government modernization efforts through initiatives like OneGov, effectively converting labor-heavy operating expenses into software-driven efficiencies. Its competitive moat is reinforced by a single data architecture, high-performance infrastructure like RaptorDB Pro, and expanded visibility into physical assets through its Armis acquisition, positioning it as both the orchestration and governance layer for enterprise AI.
While risks remain around execution timing, competitive pressure from Salesforce, and integration challenges, the market continues to undervalue this transition. Despite a ~50% drawdown, ServiceNow offers exposure to a structural shift toward the autonomous enterprise, where it stands to monetize both human and AI-driven work, creating a compelling asymmetric opportunity.
Previously, we covered a bullish thesis on ServiceNow, Inc. (NOW) by Compounding Your Wealth in April 2025, which highlighted the company’s leadership in workflow automation, strong enterprise adoption, high switching costs, and durable AI-driven growth. NOW’s stock price has depreciated by approximately 30.63% (adjusted for stock split) since our coverage, largely due to valuation compression in high-multiple enterprise software stocks despite continued strong revenue growth. CapexAndChill shares a similar view but emphasizes outcome-based monetization through AI token consumption.
ServiceNow, Inc. is on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 118 hedge fund portfolios held NOW at the end of the fourth quarter which was 104 in the previous quarter. While we acknowledge the risk and potential of NOW as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NOW and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
