ServiceNow shares closed at $124.37 on Friday, a gain of 14.38%, capping a remarkable May performance. The stock rose 40.8% for the month, its strongest monthly showing since its initial public offering in 2012, according to Dow Jones Market Data.
The rally was part of a broader resurgence in enterprise software stocks, as investors returned to the sector with renewed enthusiasm for AI-linked platforms. Over the holiday-shortened week, ServiceNow shares surged 21.8% from the previous week’s close of $102.13.
The rebound marks a sharp reversal from the first four months of the year, when the stock had fallen nearly 19% amid concerns that artificial intelligence would disrupt traditional workflow tools. The shift in sentiment comes as AI agents raise questions about whether companies like ServiceNow will benefit or lose out.
Bank of America analyst Tal Liani reinstated a buy rating on ServiceNow last week, describing its AI Control Tower as “mission-critical” for enterprise AI agent management. The endorsement helped fuel the stock’s recovery.
The broader software sector also rallied. The iShares Expanded Tech-Software Sector ETF jumped 6.3% Friday, gaining more than 21% for May. Salesforce added 8.5% on the day, while Snowflake and Okta also contributed to the positive sentiment.
ServiceNow’s first-quarter results provided a strong foundation for the rally. The company reported subscription revenue of $3.67 billion, a 22% increase year-over-year, with total revenue also rising 22% to $3.77 billion. Current remaining performance obligations, a key metric for future revenue, climbed 22.5% to $12.64 billion. CEO Bill McDermott said AI growth was “far exceeding” expectations.
Wipro shares also jumped after announcing an expanded AI partnership with ServiceNow on May 28. The deal will integrate Wipro Intelligence with the ServiceNow AI Platform, focusing on “connected, governed, and outcome-driven AI,” according to ServiceNow president and COO Amit Zavery. Wipro’s U.S.-traded ADRs surged nearly 19% overnight.
Despite the strong rebound, risks remain. Reuters reported in April that delays in big Middle East deals weighed on first-quarter subscription revenue growth, and ServiceNow’s $7.75 billion acquisition of Armis could pressure free cash flow and operating margins in 2026. Zavery told Reuters at the time, “I am not worried about the narrative,” but traders continue to debate the outlook.
ServiceNow is scheduled to present at the Evercore TMT Global Conference on June 3 at 2:10 p.m. Pacific, where it will have another opportunity to pitch its story to investors.
