"Software is dead. SaaSpocalypse is happening because AI is taking over!"
That's the sensational headlines often thrown against companies like Service NOW.
I agree AI commoditization is causing a lot of companies to no longer need SaaS shops like Service NOW. Yes also Service NOW's per seat/user licensing model goes against the AI shift of outcomes and code generation.
But I think NOW has some potential upside.
-
AI agents still need data, workflows, governance, security, orchestration layers – things that NOW specializes in.
-
NOW is like an AI control layer, they are not ignoring AI but leaning into this code enhancement tool. It favors NOW in higher-value automation not just selling more seat licenses.
-
NOW is still growing, YOY, with financials that show huge backlog and RPO growth.
Its hard to see how companies like Blackbird (a shoe maker) shot up 600% just because they said, "we're not making shoes anymore, we're going into the AI business." That is enough to tell me that the market is unusually AI-biased in all their evaluations instead of ignoring company fundamentals.
Are you buying into the dip?
Disclaimer, I don't own NOW but at its current price of $90 I may add to my portfolio.
NOW – ServiceNow a bargain or avoid?
byu/california_explorer instocks
Posted by california_explorer
3 Comments
A lot of software companies are switching to a usage model. GitHub just announced it yesterday. And they have the leverage to charge whatever they want in that usage model, and there is nothing you can do about it. Because the lock-in effects are still there.
Bargain dip for AI platform
Everyone was hating on MU when it was tanking and the sentiment was that memory stocks were dead and how there was no moat. Look at the sentiment change now. NOW is in the same position where MU was I think.