ServiceNow (NOW) After The Hitachi Deal And The Fair Value Debate

ServiceNow (NOW) has moved back into focus after Hitachi Digital Services selected its AI Platform to power Hitachi Intelligent Infrastructure Monitoring, tying real-time infrastructure data directly into automated workflows for large, complex operations.

See our latest analysis for ServiceNow.

Despite the Hitachi partnership putting ServiceNow back in the headlines, the stock’s recent performance has been mixed, with a 90 day share price return of 29.77% but a year to date share price return down 26.95%, and a 1 year total shareholder return down 42.63%. This suggests longer term momentum has faded even as shorter term sentiment has firmed.

If you are looking beyond ServiceNow for other AI driven workflow and infrastructure plays, this is a good moment to scan the market using the 52 AI infrastructure stocks

ServiceNow now trades at a clear discount to both analyst targets and some intrinsic value estimates, even after the recent rebound. Does that gap mark a valuation cushion, or a signal that fair value sits lower than the models suggest?

Most Popular Narrative: 30.5% Undervalued

ServiceNow’s most followed narrative places fair value at $155 per share, which sits well above the recent close at $107.71. This frames a sizable valuation gap that investors are trying to explain.

Yes. I am very optimistic about the future value of this stock. On Friday I set an estimated fair value of $155.00. I may revisit that estimated this week. "ServiceNow surged approximately 41% in May 2026, recovering from early-year weakness driven by sector-wide AI fears...Analysts project continued momentum in the next quarter, expecting the company's ''AI control tower'' strategy to drive subscription revenue toward a full-year target of approximately $15.75 billion." (Source: Google Finance, 6/1/2026).

Read the complete narrative.

Curious what sits behind that $155 figure? The narrative leans heavily on revenue expansion, margin strength and a premium earnings multiple tied to ServiceNow’s AI led workflow model.

Result: Fair Value of $155 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, there are still clear risks for ServiceNow, including the possibility of slower revenue expansion than expected or weaker adoption of newer AI driven workflow products.

Find out about the key risks to this ServiceNow narrative.

Another View: ServiceNow Looks Expensive On Earnings

The community fair value of $155 for ServiceNow sits alongside a very different signal from its current P/E. At 63.2x earnings, the stock trades well above the US Software industry at 29.1x, the peer average at 28x, and a fair ratio of 43.6x that the market could move toward.

That gap suggests investors are already paying a premium for ServiceNow. The key question is whether future progress will justify that richer multiple or whether the share price could drift closer to the fair ratio over time.

See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

If this mix of risks and rewards around ServiceNow feels finely balanced, consider promptly reviewing the underlying data and forming your own stance. Afterward, weigh those signals against the 3 key rewards and 1 important warning sign

Looking For More Investment Ideas Beyond ServiceNow?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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