Why ServiceNow (NOW) Is Still an AI Workflow Recovery Bet

ServiceNow, Inc. (NYSE:NOW) is one of the best underperforming tech stocks to buy for a turnaround. The latest support for the recovery case came on May 19, when Bank of America reinstated coverage of ServiceNow with a Buy rating and a $130 price target. Barron’s reported that BofA viewed ServiceNow as an AI beneficiary because its workflow platform is deeply embedded in enterprise systems, making it harder to displace as companies deploy AI agents. The stock rose sharply after the note, but was still down about 32% in 2026, keeping the underperformance angle intact.

The product case also improved on May 5, when ServiceNow launched Action Fabric, opening its “system of action” to AI agents built on ServiceNow, Claude, Copilot, or customers’ own stacks through its generally available Model Context Protocol server. The idea is that AI agents should not just read enterprise data, but execute governed work through approvals, workflows, audit trails, identity controls, and role-based permissions. That fits the turnaround thesis because AI could increase the need for ServiceNow’s orchestration layer rather than make it obsolete.

Why ServiceNow (NOW) Is Still an AI Workflow Recovery Bet

There are still risks. Reuters reported on April 22 that the stock fell after delays to the Middle East deal hurt first-quarter subscription revenue growth. However, ServiceNow also raised its 2026 subscription revenue outlook, reported $3.77 billion in first-quarter revenue, and beat earnings expectations.

ServiceNow, Inc. (NYSE:NOW) provides an AI-enabled enterprise platform for workflows across IT, security, risk, HR, finance, legal, procurement, customer service, and related business functions.

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.

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