Semiconductors Are Collapsing While ServiceNow May Be Bottoming (Rating Downgrade)

ServiceNow has reclaimed an uptrend, forming a bullish symmetrical triangle after a prolonged downtrend. NOW trades at a normalized valuation with a 3-5Y EPS CAGR estimate of 24.5%, outpacing the sector median. I assign the company a Buy rating, targeting $156 in 18 months based on a 25 P/E and $6.25 normalized EPS. Key risks include potential downside triangle breaks, weak enterprise AI ROI, and macro-driven software sector pullbacks.

Since my last ServiceNow ( NOW ) analysis , the stock has gained nearly 7% in price. We are in a very strange moment in the markets, where semiconductor stocks look like they are mid-collapse.