ServiceNow stock plunges 24% after earnings miss amid AI concerns
ServiceNow's stock just dropped 24%, its worst day ever, after the company missed Wall Street's earnings expectations.
Even though revenue grew more than 20% to $4.11 billion, profits came in slightly below forecasts.
The miss has people worried about how AI is shaking up traditional software companies, especially as software companies face recent "SaaSpocalypse" fears.
ServiceNow subscription outlook questioned
ServiceNow did bump up its subscription revenue outlook for 2026 and saw a big jump in net new AI average contract value.
Still, investors aren't thrilled since returns from the company's investments in its newly formed forward-deployed engineering team that embeds in enterprises to build AI solutions haven't shown up yet.
As Citi analyst Tyler Radke put it, "It's just going to be a little bit longer of a waiting game, and so I think the market, you know, wanted to see something a little bit sooner," with real impact likely next year.