Bank of America resets ServiceNow stock price target sharply

Wall Street sometimes loves to misread particular kinds of stocks. And it is always the ones that look disrupted from the outside but are actually getting more deeply embedded on the inside.

ServiceNow (NOW) has spent much of 2026 carrying that misread. The stock fell roughly 38% year to date the week that ended May 15, weighed down by investor fears that the rise of AI would commoditize enterprise workflow software and chip away at the moat that ServiceNow has spent two decades building.

Bank of America just pushed back on that narrative — hard. The firm restarted coverage on the American software company on Monday, May 18, with a buy rating, arguing that AI is the strongest tailwind ServiceNow has ever seen, not an existential threat.

As of this writing, NOW is up 32% year to date, according to Yahoo Finance, and the recent recovery suggests the market is beginning to arrive at the same conclusion.

"While AI is disrupting the software landscape, we think NOW stands to benefit from, rather than be replaced by, new AI solutions," wrote BofA analyst Tal Liani in a note to clients, Seeking Alpha noted.

BofA revisited ServiceNow (NOW) and offered a $130 price target in a note to clients. The core of BofA's bull case is structural. ServiceNow is not just another enterprise software vendor. It is the system that governs, routes, approves, and audits activity across organizations, and the operational backbone of how large institutions actually function.

Liani made the displacement argument explicitly in the note. Replacing ServiceNow is not a software migration. It is an organizational surgery that is costly, complex, and deeply disruptive to the workflows that enterprises depend on daily. That switching cost is the moat. And according to BofA, the agentic AI cycle actually deepens it.

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The reasoning is counterintuitive but logical. Autonomous AI agents operating in enterprises need some place to route decisions, enforce permissions, apply policies, and maintain audit trails. That is exactly what ServiceNow's platform already does. Rather than competing with AI agents, ServiceNow becomes the orchestration layer that governs them.

BofA specifically highlighted ServiceNow's AI Control Tower, Action Fabric, hybrid pricing models, and the recent acquisitions of Armis and Veza (both closed in Q1) as evidence that management is actively building the security and identity infrastructure needed to govern an agentic enterprise.