ServiceNow Inc (NYSE:NOW) shares are sliding Friday after UBS analyst Karl Keirstead downgraded the stock from Buy to Neutral and sharply reduced his price target from $170 to $100. Here’s what you should know.
- ServiceNow stock is at significant support. Why is NOW stock at lows?
UBS Flags Rising Budget Pressure On Non‑AI Software
Keirstead warned that the stock could face additional downside as companies shift more of their IT budgets toward AI‑related projects and away from traditional software categories, CNBC reported.
UBS also noted that the broader software sector is struggling with fears of AI‑driven disruption. ServiceNow, once viewed as relatively insulated from those risks, is no longer seen as immune.
UBS Says Confidence In AI Positioning Has Faded
Keirstead wrote that UBS had previously believed ServiceNow was better positioned than most application‑software vendors to benefit from the AI transition. But that view has weakened as the firm hears more examples of enterprises tightening budgets for non‑AI software.
Growing Pressure On Non‑AI Software Budgets
UBS said the pullback in non‑AI spending began to show up in December, when Fortune 500 companies were finalizing 2026 budgets. With AI infrastructure expected to ramp significantly in 2026, enterprises are reallocating funds away from traditional software categories to make room for those investments.
Keirstead estimated that more than half of UBS’s recent enterprise conversations include some mention of containing non‑AI software spend, a trend that poses a direct challenge for ServiceNow’s core offerings.
ServiceNow Technical Analysis
At $84.17, the stock is trading 21.1% below its 20-day simple moving average (SMA), the stock’s average price over the last 20 sessions, which signals sellers still control the short-term trend. It’s also trading 36.2% below its 100-day SMA, a sign the intermediate trend remains firmly pointed down.
The relative strength index (RSI), a momentum gauge, is 26.08 after entering oversold territory on 2026-04-09, which often shows downside momentum is stretched even if the trend is still bearish. With the 50-day SMA below the 200-day SMA (a “death cross” that occurred in August), the longer-term trend backdrop is still tilted toward caution until the stock can reclaim key moving averages.
Over the last 12 months, the stock is down 46.50%, which frames the current move as part of a larger drawdown rather than a one-day break. The shares are also below the prior 52-week low of $88.66 (with the 52-week low marked on 2026-04-10), a setup that can keep rallies choppy as prior support turns into overhead supply.
- Key Resistance: $106.00 — near the 20-day SMA area where rebounds have recently failed.
- Key Support: $84.00 — a near-term “line in the sand” around the current price zone.
Analyst Consensus & Recent Actions: The stock carries a Buy rating with an average price target of $229.19. Recent analyst moves include:
- UBS: Downgraded to Neutral (Lowers Target to $100.00) (April 10)
- Goldman Sachs: Buy (Lowers Target to $188.00) (April 7)
- BTIG: Buy (Lowers Target to $185.00) (April 7)
NOW Price Action: ServiceNow shares were down 7.48% at $83.09 at the time of publication on Friday. The stock is trading at a new 52-week low, according to Benzinga Pro.
Image: JarTee/Shutterstock
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