- In premarket trading on Tuesday, ServiceNow (NYSE:) stock is on the rise following Macquarie’s equity research firm’s price target increase.
- The new price target stands at $800, up from $612, making ServiceNow one of the top AI stock picks for the firm.
- ServiceNow’s “substantial” generative AI product potential, Now Assist product, and the GenAI-driven pipeline have been cited as reasons behind this upward revision.
- Macquarie believes that ServiceNow’s product strategy and use of smaller domain-specific generative AI models hold a couple of key benefits, including greater efficiency, inherent profitability, and the ability to retain customer data within the NOW ecosystem.
- ServiceNow’s Pro Plus SKUs pricing uplift presents a considerable mid-term opportunity for sustaining revenue growth by capitalizing on GenAI interest, according to the analysts.
ServiceNow’s Market Momentum
ServiceNow (NYSE:) shares are demonstrating positive momentum in Tuesday’s premarket trading. Macquarie, an equity research firm, has increased its price target for the stock, moving it from $612 to a substantial $800. ServiceNow is now one of its leading AI selections.
Analysts’ Positive Review on ServiceNow’s AI Capabilities
Analysts justified their optimistic stance on ServiceNow by emphasizing its remarkable generative AI product capabilities. They also expressed enthusiasm about the Now Assist product and the Outerform-rated NOW’s GenAI-driven pipeline.
ServiceNow’s GenAI-Driven Strategy
“What sets ServiceNow apart is that it strategically uses differentiated generative AI (GenAI) software as a feature, rather than the primary product,” Macquarie articulated. They envision the ‘Now Assist’ GenAI products leveraging core NOW Platform modules (ITSM, CSM, HR, FSM, etc) to enhance efficiency and user experience. This potential is evident in ServiceNow’s signing of 4 large GenAI deals in Q3’23 after the general availability of its Vancouver release, and a customer pipeline of over 300 for its GenAI products.
ServiceNow’s Niche AI Approach
Macquarie further accentuates that ServiceNow’s deployment of smaller, domain-specific generative AI models offers two key advantages: higher efficiency leading to profitability, and the ability to retain customer data within the NOW ecosystem.
ServiceNow’s Revenue Growth Prospects
The analysts also pinpointed the pricing uplift from the company’s Pro Plus SKUs as a “significant mid-term opportunity for ServiceNow to capitalize on GenAI interest to maintain revenue growth.”
The optimistic outlook of an esteemed firm like Macquarie hints at the potential impact of this development on the forex or trading landscape. Traders and investors might find assets related to ServiceNow’s stock and the broader AI sector attractive.