What Happened?

Shares of enterprise workflow automation company ServiceNow (NYSE: NOW) jumped 4.9% in the morning session after the company reported strong third-quarter results that beat Wall Street estimates and raised its full-year outlook. The workflow automation software provider posted revenue of $3.41 billion and adjusted earnings of $4.82 per share, both surpassing analysts' forecasts. This performance was underlined by a more than 21% year-over-year growth in subscription revenue, a key metric for its business health. Signaling confidence in its future, ServiceNow lifted its financial forecast for the full year, raising its guidance for both subscription revenue and operating margin. Management attributed the strong results to healthy demand, particularly for its AI-powered product offerings.

After the initial pop the shares cooled down to $942, up 3.2% from previous close.

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What Is The Market Telling Us

ServiceNow’s shares are somewhat volatile and have had 10 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 17 days ago when the stock gained 3.7% as the company's partners announced new investments and product launches leveraging its platform, amid a broader market rally. Apar Technologies, a global consulting firm, announced a strategic investment in Medeon, a company specializing in ServiceNow AI consulting and solutions. In separate news, DXC launched its Assure Smart Apps for the insurance industry, a product enhanced by a partnership with ServiceNow for its workflow technology. The stock's rise was also supported by a general market upswing, as U.S. stocks rallied after President Donald Trump downplayed the possibility of new tariffs on Chinese imports, easing investor concerns.

ServiceNow is down 10.7% since the beginning of the year, and at $942 per share, it is trading 19.5% below its 52-week high of $1,170 from January 2025. Investors who bought $1,000 worth of ServiceNow’s shares 5 years ago would now be looking at an investment worth $1,893.

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