Why Bernstein Calls ServiceNow (NOW) a Discount Large-Cap Growth Stock

Bernstein called ServiceNow a “discount ample headdress growth” opportunity, stating that it appears comparatively inexpensive arsenic compared to different large-cap bundle peers with marketplace capitalizations supra $50 cardinal erstwhile evaluated connected a three-year maturation versus price-to-free-cash-flow basis.

Analysts noted that the premium historically assigned to high-growth bundle has eroded further, leaving NOW trading astatine little multiples contempt rising forecasts for fiscal 2028 growth.

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Bernstein projects a 30 ground constituent currency-constant subscription gross bushed for NOW arsenic artificial quality reaches $1.2 cardinal successful yearly declaration worth successful FY26, compared to the company’s $1 cardinal guidance.

“And note: determination is imaginable conservatism successful the institution and our exemplary — neither see upside from aboriginal consumption-driven renewals. Some customers from the FY24 AI cohort ($200MM+ ACV) could necessitate aboriginal incremental AI token renewals successful the 2nd fractional of FY26, based connected their reported accelerated gait of token consumption.”

ServiceNow, Inc. (NYSE:NOW) provides a level that integrates workflows, data, and AI to coordinate however enactment flows crossed ample organizations.

While we admit the imaginable of NOW arsenic an investment, we judge definite AI stocks connection greater upside imaginable and transportation little downside risk. If you're looking for an highly undervalued AI banal that besides stands to payment importantly from Trump-era tariffs and the onshoring trend, spot our escaped study connected the champion short-term AI stock.

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Disclosure: None. This nonfiction is primitively published astatine Insider Monkey.