Enterprise software maker ServiceNow is giving Wall Street analysts more data on its artificial intelligence business, joining Salesforce. But the rise of "agentic" AI has yet to boost ServiceNow stock or most software makers as monetization ramps slowly.
At an investor day on Monday, ServiceNow said its AI-based, Now Assist software products are garnering $250 million in annual contract value. Also, ServiceNow forecast that Now Assist products will reach $1 billion in annual contract value by the end of 2026.
ACV is a financial metric for evaluating the subscription-based businesses of software-as-a-service companies.
Bank of America analyst Brad Sills was underwhelmed in a report.
"The company provided a somewhat uninspiring fiscal 2026 AI contribution target of $1 billion (up from $250 million in Q1)," Sills said. "However, it is a reasonable starting point given the current stage of the AI cycle and muted customer receptivity to new product cycles in the current environment."
In late 2024, software makers began shifting their marketing strategy away from generative AI "copilots" to autonomous, goal-driven AI "agents."
Software Makers Shift To AI Agents
Copilots — basically conversational chatbot interfaces — aim to improve worker productivity but rely on human prompts. Agents execute multistep tasks on behalf of users by solving problems and taking action.
Meanwhile, ServiceNow aims to use AI agents in information technology apps, security, human resources, operations, finance, and other businesses.
"The lion's share of the $1 billion target will come from core subscriptions that include base-level consumption packs," said TD Cowen analyst Derrick Wood in a report.
At RBC Capital, analyst Matthew Hedberg in a report said ServiceNow's $1 billion annual contract value target likely includes the recent acquisitions of Moveworks and Logik.ai.
"ServiceNow remains one of the few software companies seeing tangible GenAI monetization, and we believe its hybrid pricing strategy will lead to increased monetization longer-term," Hedberg said.
ServiceNow in March agreed to buy AI startup Moveworks for $2.85 billion. Moveworks' platform features a generative AI assistant for employee support.
On the stock market today, ServiceNow stock fell a fraction to 970.80.
ServiceNow Stock 2026 Financial Target
Salesforce recently disclosed that fiscal 2025 annual recurring revenue from its "Data Cloud" and artificial intelligence products reached $900 million, doubling from a year earlier.
Salesforce introduced Agentforce at its Dreamforce customer conference in September 2024. Companies need to harness their own proprietary data to build custom AI agent applications.
Software companies have been slow to monetize new generative AI products. Palantir Technologies, which reported first quarter earnings on Monday, did not disclose any new AI-related financial metrics.
Meanwhile, ServiceNow on Monday reiterated its fiscal 2026 target of $15 billion in subscription revenue.
Also, the software maker said its front office, customer service management software products bring in $1.4 billion in annual contract value. With its CRM software push, ServiceNow is encroaching on Salesforce and others, analysts say.
As of Monday's market close, Palantir stock had gained 63% in 2025, ServiceNow stock had retreated 7% and Salesforce stock was down 18%.
Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
