Why Analysts Are Bidding ServiceNow to New Heights: A $1,000+ Price Target Breakdown

The tech sector’s rollercoaster ride in 2025 has left few companies unscathed, but ServiceNow (NOW) continues to defy gravity. In the wake of its strong first-quarter earnings, two major investment banks—UBS and Royal Bank of Canada (RBC)—have catapulted their price targets for the cloud-based workflow giant, signaling bullishness even as macroeconomic clouds loom.

The New Targets: A Vote of Confidence

UBS kicked off the upgrades on April 23, raising its price target for ServiceNow to $1,025, up from $900. Analyst Karl Keirstead emphasized the company’s resilience, noting that ServiceNow delivered 20% year-over-year subscription revenue growth and 22% growth in current remaining performance obligations (cRPO)—key metrics of future revenue. The upgrade underscores confidence in ServiceNow’s AI and workflow automation initiatives, which Keirstead called “critical differentiators in a world demanding smarter, faster business processes.”

RBC followed suit, boosting its target to $1,060 from $975, maintaining an “Outperform” rating. Analysts highlighted ServiceNow’s record net new ACV (Annual Contract Value) and its AI-driven product roadmap. The firm also praised the company’s ability to maintain pricing power amid a challenging economic backdrop.

The Broader Picture: Consensus and Caution

While UBS and RBC are leading the charge, the broader analyst community remains cautiously optimistic. The consensus rating among tracked analysts is “Moderate Buy,” with an average target of $1,037.77—a 10% premium to the stock’s April 24 closing price of $943.

However, not all analysts are fully onboard. Mizuho, for instance, cut its target to $1,100 from $1,210 in March, citing lingering concerns about macroeconomic pressures and corporate IT spending. ServiceNow itself tempered expectations slightly in its Q1 report, noting that some clients are “pausing” decisions in light of economic uncertainty.

Why the Optimism? Breaking Down the Bull Case

1. AI Leadership: ServiceNow’s investments in AI are central to its story. The company’s Now Platform, which integrates AI into IT, customer service, and workflow management, is resonating with enterprises looking to automate complex processes. Competitors like Salesforce and Microsoft’s Azure are chasing this space, but ServiceNow’s early mover advantage is paying dividends.
2. Subscription Growth: The 20% revenue growth in Q1 isn’t just a number—it’s a testament to the recurring revenue model’s durability. cRPO, a forward-looking metric, grew 22% to $6.2 billion, suggesting strong demand for its cloud services.
3. Market Share Expansion: ServiceNow’s cross-selling strategy—adding new modules like IT service management and customer service management to its core platform—is driving customer retention. This “land and expand” model has fueled its outperformance in a crowded software landscape.

Risks Lurking in the Shadows

Despite the upbeat narrative, risks remain. ServiceNow’s Q1 gross retention rate dipped to 91% from 93% a year earlier, a red flag for investors. While management attributed this to “clients pausing” non-essential spending, it’s a reminder that even the most resilient companies aren’t immune to macroeconomic headwinds.

Geopolitical risks, such as trade tensions between the U.S. and China, and potential regulatory crackdowns on cloud providers, could also disrupt growth.

Conclusion: A Stock for the Long Game

The analyst upgrades to $1,025 and $1,060 reflect a bet on ServiceNow’s long-term potential as a leader in AI-driven enterprise software. With its $25 billion market cap and a price-to-sales ratio of 13x, the stock isn’t cheap, but its fundamentals—20% revenue growth, 22% cRPO expansion, and a sticky customer base—suggest it’s still worth the premium.

The $1,000+ price target consensus isn’t arbitrary. If ServiceNow can sustain its current growth trajectory and execute on AI initiatives, the $1,060 target (a 12% upside from current levels) could look conservative in a year. However, investors should remain mindful of the macroeconomic backdrop.

For now, ServiceNow’s combination of innovation, recurring revenue, and enterprise relevance makes it a standout name in a sector hungry for stability.

This analysis synthesizes the latest data points, highlighting both the optimism driving the price targets and the cautionary notes that keep the stock from a full-blown rally. The verdict? ServiceNow’s story is far from over—and the bulls are still in control.