Summary

• The market has classified ServiceNow as a victim of the AI displacement story compressing software. The pricing data says it has already executed the transition the bear case fears.
• 50% of net new ACV is now non-seat-based. The bear thesis on per-seat compression is what NOW has already addressed, with growth accelerating through the transition.
• Jensen Huang's May 5 framing — that the service industry is "100x larger than software" — argues the addressable market for software just expanded by two orders of magnitude.
• The 50% multiple compression on accelerating revenue is the market doing classification work, not analysis. Bernstein at $236 versus the consensus at $144 shows the bull case is recognized but not believed.
• I value NOW at $150 base case, with a $126–$177 range derived from consensus FY2027 EPS and a 25–35x multiple range defended against MSFT, CRM, and ADBE comps.

The April 23 Disconnect

Some stocks get sold on weak prints. ServiceNow was sold on a strong one.

On April 22, NOW reported a clean Q1: subscription revenue of $3.671 billion, up 22% year-on-year as reported and

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