Why ServiceNow Stock Gained 9.9%on Friday
Key Points
ServiceNow shares surged after announcing an expanded partnership with Google and HCLTech.
The stock is benefiting from a broader rotation back into software as fears that general-use AI models like ChatGPT would replace specialized SaaS companies have eased.
- 10 stocks we like better than ServiceNow ›
ServiceNow (NYSE: NOW) gained 9.9% on Friday despite both the S&P 500 and the Nasdaq Composite finishing in the red.
Shares of the AI software-as-a-service (SaaS) operator got a lift from the announcement of an expanded partnership with HCLTech and Alphabet's Google, as well as a broader bounce in software stocks.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
ServiceNow expands its AI partnership with Google and HCLTech
On June 25, HCLTech -- the Indian IT giant -- announced an expanded partnership with Alphabet's Google Cloud and ServiceNow to put AI "agents" -- software that carries out tasks on its own -- into service.
Why software stocks are bouncing back
High-priced software stocks have been hammered over the past year after investors jumped ship, believing general-use AI models like ChatGPT or Claude could soon replace the need for specific software from companies like ServiceNow.
Those fears have largely subsided, and after a massive run in AI infrastructure stocks, investors have been rotating back into software.
Source: Getty Images
Is ServiceNow stock a buy?
ServiceNow has announced a string of big AI partnerships recently with companies like IBM, Microsoft, and Nvidia. Its subscription revenue grew 22% last quarter, and the company raised its outlook.
I tend to agree that fears of AI eating software's lunch have been overblown, and while the stock isn't cheap, I think it's a buy at this price.
Should you buy stock in ServiceNow right now?
Before you buy stock in ServiceNow, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and ServiceNow wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $382,359!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,201,390!*
Now, it’s worth noting Stock Advisor’s total average return is 883% — a market-crushing outperformance compared to 205% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of June 26, 2026.
Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and ServiceNow. The Motley Fool has a disclosure policy.
