ServiceNow’s CEO Puts $3 Million on the Line to Counter AI Doom-Sayers

Bill McDermott is betting his own money that the bears have it wrong. The ServiceNow chief executive purchased $3 million worth of company stock in February, a personal vote of confidence aimed squarely at the “SaaSpocalypse” narrative that has rattled enterprise software investors.

The theory goes that AI agents will render traditional SaaS platforms obsolete. McDermott calls that “nonsense.” His counter-argument, delivered at this week’s Knowledge 2026 conference in Las Vegas, is that artificial intelligence only delivers value when it can tap into a company’s internal data — and that access runs through enterprise software. Without that context, he argued, AI models are just “expensive rats.”

More than 90% of ServiceNow’s workforce also owns company shares, McDermott noted, framing the insider buying as a collective bet on the firm’s direction.

A Stock That’s Been Cut in Half

The gesture comes at a precarious moment. ServiceNow shares have lost more than half their value from the 52-week high and are down roughly 39% year-to-date in 2026. That brutal sell-off has created what McDermott described to CNBC as a “generational entry point” — a gap between the stock price and the company’s fundamentals that he believes investors will eventually exploit.

Should investors sell immediately? Or is it worth buying ServiceNow?

The company has been walking the talk on buybacks, repurchasing $2 billion of its own shares in the first quarter. No executives or board members sold a single share during that period.

A brief reprieve arrived on May 7, when the stock jumped 7.15% on the back of analyst upgrades and bullish announcements tied to the company’s Analyst Day. The broader tech sector gained less than 1% that day. But the rally barely dented the year’s losses.

The Growth Engine Has a Stutter

The headwinds are real. Organic growth in remaining performance obligations, a key forward-looking metric, slowed to 9.6% in constant currency during the first quarter — the lowest level in some time. Management expects that figure to slip further to 5.4% in the second quarter.

Geopolitical tensions in the Middle East are delaying large on-premise deals, and the $7.75 billion acquisition of cybersecurity firm Armis, completed in April, is temporarily squeezing operating margins.

Still, the first-quarter numbers weren’t all bad. Revenue climbed roughly 22% to $3.77 billion. The problem was expectations: the stock had already been priced for perfection, and the cautious outlook triggered a 13% plunge in late April.

A $30 Billion Bet on AI

McDermott’s long-term vision is anything but cautious. By 2030, he wants subscription revenue to hit at least $30 billion — more than double the $13.3 billion the company generated in total revenue last year. When McDermott took the helm in 2019, total revenue stood at just $3.46 billion.

AI products are expected to account for roughly one-third of annual contract value by the end of the decade. To get there, ServiceNow is deepening its partnership with Microsoft, integrating its control software deep into the Microsoft ecosystem. It is also expanding its collaboration with Nvidia on “Project Arc,” an autonomous desktop agent designed to handle complex employee tasks independently.

Away from pure software infrastructure, ServiceNow is moving into logistics data. A new partnership with FedEx will funnel the courier’s massive daily data flows into ServiceNow’s systems, giving procurement teams a faster way to spot bottlenecks.

ServiceNow at a turning point? This analysis reveals what investors need to know now.

Wall Street’s Wildly Divergent Views

The analyst community is split in a way that reflects the uncertainty. Of the 31 analysts covering ServiceNow, the consensus is a “Strong Buy” with an average price target of $184.13. But the range is staggering: the lowest target sits at $85, while the highest reaches $1,160 — a sign of just how far apart opinions are on the company’s long-term AI positioning.

Bernstein recently raised its target to $236 with a buy rating, citing the ambitious growth targets and new partnerships unveiled at Knowledge 2026. The stock gained roughly 5% on that call.

McDermott, for his part, is signaling that the acquisition spree is over for now. “We are where we need to be. We have what we need,” he said when asked about future deals.

The real test comes with second-quarter earnings. That’s when management will have to deliver on the promises made in Las Vegas — and prove that the insider buying was a signal, not a sentiment.

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