What Happened?

Shares of enterprise workflow automation company ServiceNow (NYSE: NOW) jumped 3.5% in the afternoon session after it shook off broader market volatility as sentiment improved following the announcement of a significant expansion of its strategic partnership with OpenAI to integrate advanced "agentic AI" capabilities directly into its enterprise platform. 

The deal promised to move beyond simple chatbots, allowing AI agents to autonomously execute complex workflows across business systems. This announcement captured the attention of investors, placing the company at the forefront of the next generation of automated enterprise software.

After the initial pop the shares cooled down to $132.62, 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 biggest move we wrote about over the last year was 9 months ago when the stock gained 15.2% on the news that the company reported strong first-quarter 2025 results, with cRPO (current remaining performance obligations) and RPO (remaining performance obligations) both beating. Although reported revenue roughly met expectations, profitability outperformed, leading to beats for adjusted operating income and adjusted EPS. Revenue from the US public sector grew net-new ACV (annual contract value) over 30% in the quarter, which is better than many investors expected under the new Trump administration. Overall, the result was impressive, especially considering how the markets were worried about the health of ServiceNow's enterprise customers and their appetite to spend amid an uncertain macro backdrop.

ServiceNow is down 10.1% since the beginning of the year, and at $132.62 per share, it is trading 43.3% below its 52-week high of $234.08 from January 2025. Investors who bought $1,000 worth of ServiceNow’s shares 5 years ago would now be looking at an investment worth $1,233.

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