ServiceNow Stock Rebounds as SaaSpocalypse Fears Fade: What to Expect from Earnings

ServiceNow (NYSE:NOW) stock extended its strong rally and formed a golden cross pattern as analysts raised their price targets and fears of a "SaaSpocalypse" began to fade. It jumped to $158.96, its highest level since December last year and 95% above its low this year. The rally will now be put to the test when the company publishes its earnings report.

Analysts Have Turned Bullish on ServiceNow

ServiceNow, like other software companies, dropped earlier this year amid the "SaaSpocalypse" fears. The idea was that artificial intelligence tools and agents will disrupt software companies and lead to a substantial revenue deceleration. NOW’s stock tumbled to $81.2, down by 66% from its 2025 highs.

Recently, however, analysts have started to shift their outlook for some software companies. In ServiceNow’s case, the average target among analysts has jumped to $155, up from $143 three months ago. 

Guggenheim’s John DiFucci hiked his target from $125 to $175, while Truist Financial’s Miller Jump hiked from $130 to $180. Peter Weed, a Bernstein analyst, raised the target to $266, noting that the company was well-positioned in the new AI era. 

Recent earnings have reinforced the bullish view, with ServiceNow’s revenue rising by 24% to $3.9 billion and its remaining performance obligations (RPO) hitting $29 billion. Its AI business crossed $1 billion in annual contract revenue in the quarter.

Wall Street analysts expect the upcoming earnings report to show that its revenue jumped by 20% in the quarter to $4.09 billion. Its earnings-per-share is expected to jump from 96 cents to $1.02. Based on its history, chances are that the company’s revenue and earnings will be stronger than these estimates.

ServiceNow Stock Has Formed a Golden Cross Pattern

NOW stock chart | Source: TradingView

The daily chart shows that the NOW stock has rebounded in the past few months, moving from a low of $81.21 in April to $158. It has jumped above the crucial resistance level of $138.84, its highest point in June. 

Most notably, the stock formed a golden cross pattern in September as the 50-day and 200-day moving averages crossed each other. The Average Directional Index (ADX) has jumped to 31.50, its highest level since March, a sign that the rally is continuing.

Therefore, the stock will likely continue rising, with the next important target being at $200, up by 25% above the current level.

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