What Happened?
Shares of enterprise workflow automation company ServiceNow (NYSE: NOW) jumped 3.7% in the morning session after strong earnings from enterprise leaders ignited a massive rally across enterprise tech.
Atlassian led the charge, soaring nearly 30% after reporting 32% revenue growth and an unexpected acceleration in cloud adoption. Similarly, Twilio jumped 20% following its fastest growth in three years, fueled by a surge in demand for its AI-integrated voice tools.
This recovery was also bolstered by record-breaking cloud strength; while AWS grew a solid 28%, Google Cloud stunned Wall Street with a 63% revenue increase, proving that enterprise AI infrastructure spending is finally translating into tangible, top-line returns for the software layer. This rally reflected a strategic pivot as investors returned to high-growth software-as-a-service (SaaS) names that previously trailed the broader market.
After the initial pop the shares cooled down to $93.49, up 2.6% from previous close.
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What Is The Market Telling Us
ServiceNow’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 10 days ago when the stock gained 5.5% on the news that the stock rebounded from a steep sell-off that followed its first-quarter earnings report.
The drop in the previous trading session occurred even though ServiceNow beat revenue and earnings estimates and raised its full-year guidance. The initial negative reaction was tied to investor concerns over deal timing, as management noted a headwind from the delayed closings of several large deals in the Middle East due to regional conflict. This issue was reported to have impacted subscription revenue growth. The stock's subsequent recovery suggested that some investors may have viewed the prior session's sharp decline as excessive.
Further boosting sentiment, German software giant SAP announced better-than-expected first-quarter profit and confirmed its long-term cloud outlook. SAP's strong performance appeared to ease investor concerns about the impact of artificial intelligence on the broader enterprise software industry.
ServiceNow is down 36.6% since the beginning of the year, and at $93.49 per share, it is trading 55.3% below its 52-week high of $208.94 from July 2025. Investors who bought $1,000 worth of ServiceNow’s shares 5 years ago would now be looking at only $967.24.
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