NOW: Upgrading to Buy – The Price Is Right; US Gov't to Help, But Not AI

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NOW: Upgrading to Buy – The Price Is Right; US Gov't to Help, But Not AI

July 1, 2026

John DiFucci john.difucci@guggenheimpartners.com NOW: Upgrading to Buy – The Price Is Right; US

212 518 9670 Gov't to Help, But Not AI

Richard Magnus

richard.magnus@guggenheimpartners.com

212 518 9308 Key Message: We are upgrading NOW to Buy from Neutral, as we believe current levels

present an attractive opportunity for investors to purchase a comfortably profitable stock Tamjid Chowdhury

tamjid.chowdhury@guggenheimpartners.com likely to continue to grow at double digits on an organic, constant currency basis for the

212 823 6739 foreseeable future. We view NOW as a well-run company that should see improvement

from the important US Federal Govt going forward, though likely AI pressure is real.

Recall that we upgraded the stock in December from Sell to Neutral as our call played

out, and we believe one should never overstay their welcome with a Sell rating in

NOW BUY Software.Neutral, ButSinceChallengesthen, muchRemain”of ourdatedthesisDechas15, 2025).materializedFollowing(seeour“NOW:upgradeUpgradingto Neutral,to

ServiceNow, Inc. NOW shares declined another 35% (vs. IGV -16%, and S&P +10%) as investors sold

Sector: Software software over fears of an impending AI-driven “SaaSpocalypse". At current levels, we

see opportunity from a valuation perspective. NOW has continued leveraging M&A

Rating Change (for what we believe is to sustain growth) in the name of Armis and others, and we also

Share Price $99.28 believe NOW has still not yet shown tangible evidence of AI monetization (on which

Price Target $125.00 much of NOW's future plans depend). We want to be clear that we are not upgrading

Prior NA shares because we see NOW as an AI beneficiary (which has been the narrative of