ServiceNow (NOW) Jumps 9.4% as AI Fears Ease, June 02

ServiceNow NOW shares rose 9.4% to $135.86 on June 2, extending a multi-day rally as investors rotated back into software stocks. The jump followed Nvidia CEO Jensen Huang’s statement at Computex 2026 that AI agents will create opportunities for software partners, not displace them. This reverses months of sector concern that artificial intelligence would cannibalize software demand.

What Sparked the Rally

Nvidia CEO Jensen Huang said at Computex in Taiwan that AI agents will be “the largest opportunity” for software companies. ServiceNow, listed as a Nvidia partner, benefits directly from this endorsement. The stock also gained from Snowflake’s May 28 Q1 results, which showed enterprise AI adoption accelerating rather than disrupting software demand. Snowflake jumped 36% that day on the news.

Why This Matters for ServiceNow

ServiceNow’s AI Control Tower platform manages autonomous AI agents for enterprises. Bank of America analyst Tal Liani reinstated coverage with a buy rating, calling the platform “mission-critical” for organizations. ServiceNow and Snowflake are formal platform partners through Zero Copy integration, meaning Snowflake’s AI account growth directly feeds ServiceNow’s pipeline.

Valuation Concerns Remain

Despite the rally, ServiceNow trades at a P/E ratio of 79.75x, well above the software industry average of 29.33x. Simply Wall St’s Fair Ratio framework estimates a fair P/E of 45.45x, suggesting the stock remains overvalued. Meyka rates NOW a B+ with a neutral recommendation, citing strong fundamentals but elevated valuation multiples. With Meyka rating the stock B+ and analyst consensus at Buy, the data points to mixed signals on near-term upside.

Technical Picture Shows Overbought Conditions

ServiceNow’s RSI stands at 78.67, indicating overbought conditions. The stock has posted 19 moves greater than 5% over the past year, showing high volatility. Meyka’s 12-month price forecast is $748.82, implying 451% upside from current levels, but this assumes continued strong execution and margin expansion.

Final Thoughts

ServiceNow’s 9.4% jump reflects renewed confidence in software stocks as AI enablers, not victims. However, elevated valuations and overbought technical conditions warrant caution for new buyers.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.