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Is ServiceNow $NOW the Most Mispriced AI Software Stock?

With AI adoption accelerating and valuation near historic lows, the risk-reward may be shifting back in investors' favor.

Author

George Babis
July 15, 2026

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2026 Price Target: 

For most of 2026, software has been one of the market’s least-loved sectors. While investors rushed into AI infrastructure names tied to GPUs, networking, memory and data centers, many high-quality software companies were left behind. ServiceNow $NOW ( ▲ 0.23% ) has been one of the biggest victims of that rotation.

Yet beneath the weak sentiment, the business itself continues to execute. Revenue growth remains close to 20%, free cash flow margins remain among the highest in enterprise software, and management believes its addressable market has expanded to roughly $600 billion.

The upcoming earnings report could become an important test—not because investors doubt ServiceNow is a great company, but because they want proof that AI is becoming a meaningful growth driver rather than simply another product feature. Let’s take a deeper dive.

$NOW ( ▲ 0.23% ) has suffered lately amid Saaspocalypse fears

An under-the-radar high-flying software name

🧐 My second-largest position is a software name most investors have never heard of. I started accumulating earlier this year in the low teens. It's now up more than 100%.

Investment Club members had the trade, the sizing, and the thesis before the move.

If you'd like to be part of it, you can join us here.

George

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