ServiceNow Surges 6%, Salesforce Climbs 4% as Government AI Deals Lift Enterprise Software

Quick Read

• NOW jumped 6% connected ServiceNow's Q2 AI declaration milestone, portion CRM gained 4% aft Salesforce landed a $1.6 cardinal Veterans Affairs Agentforce deal.

• Oracle's $7 cardinal Pentagon woody reinforces a authorities AI spending wave; this question is helping to assistance the IGV ETF, which holds some NOW and CRM arsenic apical positions.

• Act now: the expert who called NVIDIA successful 2010 conscionable named his apical 10 AI stocks — and Salesforce didn't marque the cut. Grab the names FREE today.

Shares of ServiceNow (NYSE:NOW) are up 6% successful Friday midday trading, changing hands astatine $97.36. Meanwhile, Salesforce (NYSE:CRM) banal is climbing 4% to $162.56 arsenic a question of national AI woody travel lifts endeavor bundle aft months of pain.

The bounce comes disconnected a brutal run. ServiceNow banal is down 40% twelvemonth to day (YTD), and Salesforce shares person shed 40.5% implicit the aforesaid span. Today's league reads arsenic an oversold rebound with 2 fresh, name-specific catalysts underneath it.

Both companies beryllium astatine the halfway of a rotation from AI infrastructure names backmost into application-layer software, wherever AI is yet translating into recurring gross alternatively than earthy capex.

ServiceNow's Q2 Beat and Raise Lights the Fuse

ServiceNow reported Q2 FY2026 results Wednesday aft the close. The company's subscription gross climbed 24.5% to $3.88 cardinal twelvemonth implicit twelvemonth (YoY), and existent remaining show obligations (cRPO) roseate 21% to $13.2 billion. AI yearly declaration worth crossed $1 cardinal up of schedule, with agentic-AI accumulation customers up ninefold successful 9 months.

CEO Bill McDermott stated successful the release, "ServiceNow's exceptional Q2 results solidify our presumption arsenic the fastest-growing large endeavor bundle and cybersecurity company." ServiceNow's absorption raised its FY26 subscription gross usher to astatine slightest $15.755 billion, and information products landed successful 16 of the 20 largest deals acknowledgment to Armis, Veza, and the AI Control Tower stack.

Act now: the expert who called NVIDIA successful 2010 conscionable named his apical 10 AI stocks — and Salesforce didn't marque the cut. Grab the names FREE today.

Analysts' reactions person been assertive overall. Research reports from Bernstein (Outperform, $248), Evercore ISI ($160), JPMorgan (Overweight, $150), Cantor ($141), and Jefferies ($140) each lifted their ServiceNow banal terms targets. Moreover, a caller Bank of America (NYSE:BAC) probe enactment flagged an "overlooked AI advantage" astatine a $130 Buy rating.

The carnivore lawsuit has weight, too. UBS chopped ServiceNow banal to $110 and Neutral, noting that "demand remains mixed." Notably, ServiceNow's Q2 besides benefited from national on-premise gross pulled guardant from Q3, and the Q3 subscription usher of $3.975 to $3.98 cardinal sits beneath the $4 cardinal Street view. Additionally, ServiceNow's gross borderline slipped to 77.9% from 81%.