ServiceNow stock has its worst day ever after weak results

ServiceNow, a company that sells software to large businesses, saw its stock sink 27% on Thursday. That was its worst day on record. Its third-quarter results were not bad, but they were not strong enough to calm investors who worry that artificial intelligence (AI) could upend the software industry.

What the numbers showed

• Revenue grew more than 20% to $4.11 billion, close to the $4.10 billion analysts expected.
• Adjusted earnings were $1.00 per share, just under the $1.02 forecast.
• The company slightly raised its 2026 subscription revenue outlook to $15.78 billion to $15.79 billion.
• Net new AI average contract value, a measure of the size of new AI deals, jumped 65%.

Why investors reacted so sharply

Some investors fear a "SaaSpocalypse," the idea that new AI tools will break the way traditional software companies make money. These results did little to ease that worry. Citi analyst Tyler Radke called the lack of upside "uncharacteristic" for ServiceNow.

He also pointed to a new team of engineers that the company places inside customer businesses to build AI solutions. The payoff has not shown up yet. "I think you got to wait until next year to really see that inflection," Radke said.

What is not known yet

The material does not say how much AI will add to ServiceNow's sales, or when. Investors wanted proof sooner. For now, they have a wait-and-see answer.