ServiceNow Shares Gain Momentum Following Goldman Sachs' Bullish Endorsement
Shares of ServiceNow (NYSE: NOW) opened the week on a firmer footing, climbing nearly 1% in Monday's trading session. The gain notably outpaced the S&P 500's 0.5% increase, reversing some of the stock's recent volatility. The uptick was largely attributed to a significant vote of confidence from Wall Street powerhouse Goldman Sachs.
In a move closely watched by investors, Goldman Sachs added three companies to its U.S. Conviction List—a curated selection of its highest-conviction stock ideas. ServiceNow joined delivery platform DoorDash and energy firm Golar LNG on the list. The inclusion signals the bank's strong belief in the company's near- and long-term prospects.
Led by analyst Steven Kron, the Goldman Sachs team published a bullish note highlighting ServiceNow's potential to aggressively expand beyond its core IT service management (ITSM) stronghold. The analysts project the company can successfully capture market share in adjacent, high-value areas like customer relationship management (CRM) and human resources (HR) software. This expansion runway, Goldman argues, could support an organic compound annual growth rate (CAGR) of approximately 20% through 2029.
"ServiceNow's platform model is its hidden weapon," the note suggested. "Its architecture is inherently designed for horizontal expansion into business functions where operational efficiency is both critical and elusive. The company has a proven track record of cross-selling and upselling within its existing client base, which provides a formidable launchpad for entering new markets."
The optimistic analysis arrives as enterprise software buyers increasingly seek to consolidate vendors and platforms, a trend that plays to ServiceNow's strengths as a unified workflow cloud provider.
Investor Perspectives
Michael Chen, Portfolio Manager at Horizon Capital: "Goldman's call validates a thesis many growth investors have held for quarters. ServiceNow isn't just an IT tool anymore; it's becoming the central nervous system for enterprise operations. The 20% CAGR estimate through '29 is ambitious but underscores the vast total addressable market ahead."
Sarah Jennings, Retail Investor: "It's encouraging to see a major bank reaffirm the long-term story. As a shareholder, I'm less focused on daily moves and more on the execution against this expansion strategy into CRM and HR. That's where the real value will be created—or lost."
David R. Foley, Independent Market Commentator: "This is classic Wall Street groupthink. They slap a fancy label on a stock everyone already owns, talk up a 'hidden' advantage that's been discussed for years, and retail investors chase the momentum. Let's see if the growth materializes before the multiples contract. Remember, this is the same crowd that's perpetually 'bullish' until they very suddenly aren't."
Priya Mehta, Tech Analyst at Clearwater Research: "The note is less about new information and more about timing and conviction. In a shaky market, highlighting a blue-chip grower with a clear path to expand its revenue streams provides a narrative anchor for institutional money looking for safe exposure to digital transformation."
Disclosure: The author has no position in any securities mentioned. Other firms cited may have positions in the companies discussed.