Market Volatility: Tech Giants Report Mixed Earnings
ServiceNow Stock Plummets Despite Beating Estimates
On Wednesday, ServiceNow, a leading enterprise software maker, reported its fourth-quarter earnings, which exceeded Wall Street estimates. However, the company’s revenue met expectations, and its forecast for 2025 subscription revenue growth fell short of projections. As a result, ServiceNow stock plummeted over 9% to $1037 on Thursday.
Earnings Breakdown
ServiceNow reported earnings of $3.72 per share, an 18% increase, and revenue rose 21% to $2.957 billion. While these numbers beat estimates, the company’s subscription revenue growth of 21% to $2.87 billion slightly missed the consensus estimate of $2.88 billion.
Analysts Weigh In
TD Cowen analyst Derrick Wood noted that ServiceNow reported a good Q4, but the upside was slightly softer than recent quarters. RBC Capital analyst Matthew Hedberg attributed the lower-than-expected guidance to currency exchange rates amid a strong U.S. dollar.
AI Strategy and Guidance
In a recent interview, Chief Executive Bill McDermott discussed ServiceNow’s artificial intelligence strategy and the ramp-up of AI products. Analysts believe the company’s prudent expectations for AI monetization and conservatism around the federal vertical and go-to-market changes contributed to the softer guidance.
Company Performance
Heading into the earnings report, ServiceNow stock had gained 7% in 2025 and 47% over the past 52 weeks. The company’s software tracks and manages services provided by information-technology departments, and its self-service tech portal enables company employees to access administrative and workflow tools.
Industry Impact
The mixed earnings report from ServiceNow, along with Microsoft’s disappointing earnings, contributed to a decline in Dow Jones futures on Thursday. The surprise weekly jobless claims also added to the market volatility.
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