The growth trajectory of automation suggests that robotics stocks might be a hot opportunity. Grand View Research projects that the robotic process automation market will achieve a 43.9% compounded annual growth rate (CAGR) from now until 2030. The research firm forecasts a $30.85 billion valuation for the entire market at 2030, which suggests a 466% growth rate from 2026 to 2030.
Many robotics stocks should rally with the industry. Chatbots, generative artificial intelligence (AI) models, and autonomous vehicles could replace mundane tasks and boost productivity. However, ServiceNow (NOW +0.45%) may be one of the top stocks to consider in the industry due to its effective chatbots, large customer base, and high retention rates.
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What ServiceNow does
ServiceNow provides GenAI-powered conversational chatbots to enterprise customers to handle mundane tasks and address basic customer support questions without human intervention. These bots also simplify internal workflows and boost productivity.
NYSE: NOW
Key Data Points
Traditional chatbots offer scripted responses to queries, but generative AI is changing the landscape. AI chatbots continue to learn and tap into an ever-growing knowledge bank that doesn't require human intervention. These robots learn from each interaction and act as valuable resources for workers.
ServiceNow makes almost all of its revenue from subscription plans. The company reported $3.4 billion in Q3 2025 revenue, which was up by 22% year over year. Subscription revenue made up $3.3 billion, which came to 97% of total sales. ServiceNow also has a healthy backlog based on $11.35 billion in remaining performance obligations.
Enterprise customers who use ServiceNow stick around for a while. It's hard and costly for customers to switch to another provider once they use ServiceNow's platform. That's why the company reported a 97% renewal rate among its customers. ServiceNow noted that the renewal rate was 98% if you exclude the closure of a large U.S. federal agency.
ServiceNow has a vast customer base
ServiceNow delivered high earnings growth rates in 2025, even with the closure of the large U.S. federal agency that brought in a lot of revenue for the company. It was able to absorb the impact of that loss because of a customer base consisting of nearly 8,400 businesses. That group of clients includes nearly 85% of the Fortune 500, which demonstrates ServiceNow's ability to work with top players and sign lucrative deals.
The dealmaking was still in full force in Q3 2025. ServiceNow finalized 103 transactions over $1 million in net new annual contract value (ACV) in the quarter, and it also ended the quarter with 553 customer contracts that come to more than $5 million in ACV. That latter figure is a 18% year-over-year improvement.
A high retention rate with this customer base and plenty of social proof from working with the largest enterprises position ServiceNow as a leader in the robotic process automation industry. The growth stock has been a long-term winner, too. ServiceNow shares are up by roughly 1,000% over the past decade.
Explaining the recent drop
Although ServiceNow is well-positioned to rally amid an AI robot boom, the stock has dipped this past month. ServiceNow spent $7.75 billion to acquire cybersecurity firm Armis, which has ruffled some feathers.
Critics of the deal argue that ServiceNow committed a lot of cash and debt to an acquisition that doesn't align with the business. Cybersecurity solutions may boost overall revenue, but not everyone sees a connection between cybersecurity and AI chatbots. It's a big investment and reflects ServiceNow's commitment to fuel growth with acquisitions, but investors weren't happy. Shares plunged by 11% on the day it was announced.
While strategic acquisitions can benefit a company in the long run, some corporations use acquisitions to fuel growth as their underlying businesses slow down. ServiceNow's 22% year-over-year revenue growth in Q3 is slower than in previous years. Furthermore, its net income only increased by 16% year over year, which may limit profit margin expansion in the future.
The company's recent acquisition of Moveworks is another expensive purchase that aims to offer more synergies but reflects a growing trend of using acquisitions to gain market share.
If these acquisitions pay off and accelerate revenue growth, ServiceNow will look like a winner at current prices. AI bot demand should continue to soar as they become more advanced and can handle more complicated tasks. ServiceNow isn't a speculative robotics stock due to its large customer base, and it could generate enticing returns if growth rates pick up again. The long-term growth of the industry suggests ServiceNow's business should gain market share.
