BofA Reinstates ServiceNow at Buy: The Workflow Giant Built for the Agentic AI Era

Quick Read

ServiceNow (NOW) received a Buy rating and $130 price target from Bank of America (BAC) on May 18, with the firm arguing that the workflow platform is uniquely positioned to serve as the control tower for autonomous agents across IT, employee, and customer workflows.

Bank of America is betting that system-of-action platforms win the agentic AI era, positioning ServiceNow as a beneficiary rather than a victim of AI disruption in enterprise software.

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Bank of America (NYSE:BAC) reinstated its coverage of ServiceNow (NYSE:NOW) with a Buy rating and a $130 price target on May 18. The call frames the workflow software leader as a clear AI beneficiary, even as Bank of America reinstated Salesforce (NYSE:CRM) at Underperform on the same day. For prudent investors, the split call matters: Bank of America is betting that the system-of-action layer wins the agentic AI era.

ServiceNow stock has endured a brutal stretch, with NOW shares falling 36% year to date (YTD) through May 15, even as the broader software group stabilizes. That setup is exactly why this reinstatement matters now.

Analyst Ratings

The Analyst’s Case

Bank of America’s thesis is straightforward: while AI disrupts the software landscape, ServiceNow stands to benefit from, rather than be replaced by, new AI solutions. The firm argues that ServiceNow’s workflow entrenchment “uniquely position it to benefit” from autonomous agents deployed across IT, employee, and customer workflows.

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Autonomous agents need somewhere to operate and a system of action to coordinate tasks, approvals, and data. ServiceNow’s Now Platform increasingly serves as that control tower for enterprise customers.

The contrast with Salesforce is telling. Both compete in agentic AI, yet Bank of America sees ServiceNow’s workflow moat as more durable than Salesforce’s CRM-centered Agentforce play.

Price Target

Company Snapshot

ServiceNow, led by CEO Bill McDermott, sells the Now Platform for enterprise workflow automation, with AI products including Now Assist, Workflow Data Fabric, and the recently acquired Moveworks. The company carries a market cap of about $98 billion, with trailing revenue near $14 billion.

ServiceNow’s Q4 FY2025 results, reported January 28, showed revenue of $3.57 billion, up 21% year over year (YoY), with current remaining performance obligations (cRPO) of $12.85 billion, up 25% YoY. Now Assist net new annual contract value (ACV) more than doubled YoY, signaling that AI monetization is taking hold inside ServiceNow’s installed base.

Why the Move Matters Now

ServiceNow stock trades at a forward P/E ratio of 22x, with shares at $94.97 after the YTD slide. The Street’s average analyst price target sits at $143.06, and consensus skews bullish, with 34 Buy and 9 Strong Buy ratings on NOW stock.

The bull case rests on workflow entrenchment, a broadening platform footprint via the pending Armis and Veza acquisitions, and deepening AI partnerships. The bear case centers on high absolute valuation, slowing macro IT spending, and execution risk on Now Assist monetization.

What It Means for Your Portfolio

The upgrade signals that workflow-of-record platforms could be among the cleaner AI beneficiaries in enterprise software. ServiceNow’s 25% cRPO growth and expanding platform footprint offer a defensible growth path, though the YTD drawdown reminds investors that high-multiple SaaS names remain volatile.

A measured approach makes sense. Position sizing should reflect ServiceNow stock’s beta, the broader IT spending backdrop, and Bank of America’s $130 price target as one input among many for a thesis tied to agentic AI adoption pace.

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