Quick Read
NOW jumped 6% on ServiceNow’s Q2 AI contract milestone, while CRM gained 4% after Salesforce landed a $1.6 billion Veterans Affairs Agentforce deal.
Oracle’s $7 billion Pentagon deal reinforces a government AI spending wave; this wave is helping to lift the IGV ETF, which holds both NOW and CRM as top positions.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Salesforce didn’t make the cut. Grab the names FREE today.
Shares of ServiceNow (NYSE:NOW) are up 6% in Friday midday trading, changing hands at $97.36. Meanwhile, Salesforce (NYSE:CRM) stock is climbing 4% to $162.56 as a wave of federal AI deal flow lifts enterprise software after months of pain.
The bounce comes off a brutal run. ServiceNow stock is down 40% year to date (YTD), and Salesforce shares have shed 40.5% over the same span. Today’s session reads as an oversold rebound with two fresh, name-specific catalysts underneath it.
Both companies sit at the center of a rotation from AI infrastructure names back into application-layer software, where AI is finally translating into recurring revenue rather than raw capex.
ServiceNow’s Q2 Beat and Raise Lights the Fuse
ServiceNow reported Q2 FY2026 results Wednesday after the close. The company’s subscription revenue climbed 24.5% to $3.88 billion year over year (YoY), and current remaining performance obligations (cRPO) rose 21% to $13.2 billion. AI annual contract value crossed $1 billion ahead of schedule, with agentic-AI production customers up ninefold in nine months.
CEO Bill McDermott stated in the release, “ServiceNow’s exceptional Q2 results solidify our position as the fastest-growing major enterprise software and cybersecurity company.” ServiceNow’s management raised its FY26 subscription revenue guide to at least $15.755 billion, and security products landed in 16 of the 20 largest deals thanks to Armis, Veza, and the AI Control Tower stack.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Salesforce didn’t make the cut. Grab the names FREE today.
Analysts’ reactions have been aggressive overall. Research reports from Bernstein (Outperform, $248), Evercore ISI ($160), JPMorgan (Overweight, $150), Cantor ($141), and Jefferies ($140) all lifted their ServiceNow stock price targets. Moreover, a fresh Bank of America (NYSE:BAC) research note flagged an “overlooked AI advantage” at a $130 Buy rating.
The bear case has weight, too. UBS cut ServiceNow stock to $110 and Neutral, noting that “demand remains mixed.” Notably, ServiceNow’s Q2 also benefited from federal on-premise revenue pulled forward from Q3, and the Q3 subscription guide of $3.975 to $3.98 billion sits below the $4 billion Street view. Additionally, ServiceNow’s gross margin slipped to 77.9% from 81%.
