JPMorgan Affirms Bullish Stance on ServiceNow After Partner Survey, Sees AI as Growth Driver, Not Threat

Wall Street's focus on artificial intelligence continues to spotlight key platform players, with ServiceNow (NYSE: NOW) remaining a central figure. JPMorgan Chase & Co. reaffirmed its confidence in the workflow software giant this week, maintaining an Overweight rating and a $215 price target after conducting a round of partner channel checks.

Analyst Mark Murphy's latest assessment, issued January 27, follows discussions with nine partners within ServiceNow's ecosystem. The feedback paints a picture of a company navigating a complex macroeconomic landscape. While the forward-looking outlook appears to be improving, recent activity—particularly within the U.S. federal segment—has shown some softness.

"The growth narrative is evolving, not eroding," Murphy noted in the report. Partner expectations for ServiceNow's organic growth have tempered modestly, with several now modeling rates in the high teens, a step down from the sustained 20%+ levels of recent years. However, the core business engine remains robust.

Critically, half of the partners surveyed reported no pausing or deferral of ServiceNow projects due to external factors like trade tensions or federal budget adjustments. Initiatives centered on mission-critical renewals, AI-driven upgrades, and operational cost reduction are continuing to move forward. The business tone also improved in the fourth quarter, according to five partners, up from four in the prior survey.

Perhaps the most significant finding pushes back against a prevailing market concern: the potential for generative AI to cannibalize existing software spending. JPMorgan's partners largely dismissed the idea that AI would lead ServiceNow customers to scale back. One partner explicitly stated they had seen "no evidence" of customers reducing or abandoning deployments. Instead, AI capabilities are being viewed as a catalyst for expansion and new monetization opportunities, augmenting the existing Software-as-a-Service (SaaS) footprint rather than displacing it.

"In the current cost-conscious environment, ServiceNow's message around efficiency and automation is resonating powerfully," the report added, reinforcing the firm's positive stance.

ServiceNow provides a cloud-based platform that uses workflow automation, data integration, and AI to streamline operations for large enterprises.

Market Voices

David Chen, Portfolio Manager at Horizon Capital: "This checks the box for resilience. The partner feedback suggests ServiceNow is entrenched in essential operations. The moderation in growth expectations is prudent, not alarming, given the macro backdrop."

Rebecca Shaw, Independent Tech Analyst: "The AI-as-growth-driver narrative here is crucial. It dispels a key bear case and shows ServiceNow is successfully transitioning from a workflow tool to an intelligent platform. This justifies its premium valuation."

Marcus Thorne, Editor at 'The Skeptical Investor' blog: "High-teens growth for a company trading at this multiple? That's a downgrade, no matter how JPMorgan spins it. The 'no evidence' of AI displacement is anecdotal and near-sighted. This feels like analysts clinging to a favorite name while the fundamentals subtly shift."

Anita Lopez, CIO at ClearPath Advisors: "The stability in federal and enterprise renewals is the real story. It demonstrates the mission-critical nature of the platform. Volatility might be elsewhere in tech, but ServiceNow's core appears solid."

Disclosure: This is independent financial news analysis. The author holds no position in NOW at the time of publication.