ServiceNow (NOW 2.46%) isn't doing particularly well in the stock market this year. That's hardly a great surprise, given the enterprise software specialist's nearly 28% decline across all of 2025.
A stock split didn't spur interest in the specialty tech stock, despite the measure making ServiceNow's price cheaper on a per-share basis, and neither the announcement of a high-profile acquisition nor a pair of platform enhancements helped, either.
2025: A busy and eventful year
ServiceNow didn't start off too badly that year. It barreled into 2025 with a crucial update of its foundational, artificial intelligence (AI)-enhanced ServiceNow AI Platform.
Image source: Getty Images.
The Yokohama upgrade, announced in January and rolled out in March, exacerbated the platform's shift from an assistive AI system to an agentic one. In other words, the update made the advanced AI functionalities more autonomous, rather than simply responsive to user queries. This was followed by another upgrade, named Zurich, announced later in the year.
Not long after this, the company beat both its own and consensus analyst expectations for revenue in its first-quarter results. Overall and subscription revenue both rose by 19% year over year (to just under $3.1 billion for the former).
Better, it crushed the collective pundit estimates for profitability, with net income not in accordance with generally accepted accounting principles (GAAP) landing at $846 million.
The company couldn't sustain the initially positive momentum from that earnings release, and the share price started to erode in the second half of the year.
This, despite a brief pop after ServiceNow announced that stock split just before Halloween. At a 5-for-1 split, the stock promised to become more affordable for many investors, but that alone couldn't sustain the rally.
Another damper on the stock price occurred in December, when the company announced the largest acquisition in its history -- the nearly $7.8 billion, all-cash purchase of cybersecurity company Armis.
While Armis can certainly enhance the attractiveness of its new owner's platform, that price tag was awfully steep to many, and they obviously didn't see great value in the buy.
NYSE: NOW
Key Data Points
An undeserved dip
I don't feel the ultimately steep sell-off of ServiceNow that year was justified. The company is still growing its fundamentals at double-digit rates, and it does a fine job enhancing that platform (which remains a compelling proposition for customers).
The jury's still out on whether the Armis deal will improve fundamentals, but security is a major concern for clients, and I think the acquisition should at least keep the ServiceNow AI Platform competitive in the marketplace. I'm not as down on its maker's stock as many investors are these days.
