Investors focused on the uncertain payoff from artificial intelligence after ServiceNow shares fell 27% Thursday, a move CNBC linked to quarterly results and renewed concern that AI may undermine established software businesses. CNBC said the decline put the stock on course for its largest one-day loss on record.
ServiceNow reported third-quarter revenue of $4.106 billion, up 20.5% year over year, and non-GAAP earnings of $1.00 per share. CNBC said analysts polled by LSEG had expected $4.10 billion in revenue and $1.02 per share in earnings, respectively.
CNBC also reported that net new AI average contract value rose 65%. ServiceNow separately put its AI annual contract value target at $1.7 billion, up 70% from the start of the year, according to its third-quarter release. The figures describe distinct contract-value measures.
ServiceNow raised its full-year 2026 subscription revenue outlook to a range of $15.78 billion to $15.79 billion. CNBC characterized the increase as slight. In the second quarter, the company reported subscription revenue of $3.877 billion, up 24.5% year over year, as detailed in EconoTimes’ earlier coverage of its subscription revenue growth. Current remaining performance obligations stood at $13.20 billion on June 30, 21% above the year-earlier level, the company’s results showed.
CNBC linked the sell-off to a wider question facing software businesses: whether new AI capabilities could erode traditional business models. The outlet described the revived concern as part of what it called recent “SaaSpocalypse” fears. CNBC also reported that investors were looking for stronger evidence that AI investments would pay off.
Citi’s Tyler Radke told CNBC that investors wanted earlier evidence of returns from a new ServiceNow team that works with enterprise customers on AI solutions. Radke said the market might not get a clear indication of the group’s impact until next year.
