Here's why ServiceNow stock is soaring after Q2 earnings

ServiceNow stock rallied 6% on Thursday after the company posted strong second-quarter results that topped analyst forecasts and lifted its outlook for the rest of the year.

The numbers point to growing demand for its AI-driven cloud software, particularly among large enterprises, a key signal for investors betting on long-term growth.

This surge reflects confidence in ServiceNow’s robust subscription revenue growth and expanding high-value customer base, underscoring the company’s leadership in digital transformation and enterprise AI solutions.

Market enthusiasm was further fueled by optimistic guidance and strategic innovations unveiled during the quarter.

ServiceNow Q2 earnings

For the quarter, revenue came in at $3.215 billion, up 22.5% from a year ago. Around $3.113 billion of that came from subscription services, which also grew at the same pace.

Net income rose to $385 million, or $1.84 per share, compared to $262 million, or $1.26 a share, during the same period last year.

On an adjusted basis, earnings hit $4.09 per share, well above the $3.57 analysts were expecting.

ServiceNow hit a fresh milestone in customer adoption this quarter, reporting that the number of clients with annual contract values exceeding $20 million jumped more than 30% year-over-year, a sign of growing traction with large enterprises.

The strong Q2 report sent shares up 6% in intraday trading, even as broader markets remained relatively flat.

The stock opened at $955.98 and climbed as high as $1,009.00 at press time, coming within striking distance of its 52-week high.

Analysts credited the move to ServiceNow’s track record of consistent execution and rising demand for its AI-powered platforms, which continue to gain ground with enterprise customers.

The raised guidance only added to investor confidence.

ServiceNow stock: What analysts say?

ServiceNow’s earnings beat didn’t just impress investors, it prompted a wave of analyst revisions.

Several firms maintained their bullish stance, pointing to strong execution in AI workflows and growing traction among large enterprise customers.

The company’s ability to expand within existing accounts was seen as a sign that its platform is becoming more deeply embedded in corporate operations.

Price targets were raised across the board. Some analysts now see the stock heading toward $1,100, up from prior forecasts in the low-$900s.

The analysts noted that ServiceNow is “consistently outperforming both peers and expectations,” particularly as demand for AI-driven enterprise tools continues to pick up.

That said, a few analysts urged caution. With the stock already up significantly this year, questions around valuation are starting to resurface.

There’s also the broader concern about how long ServiceNow can stay ahead of the curve in what’s quickly becoming a crowded AI space.

Even so, the overall tone remains constructive. Most agree that the company is well-positioned, but expectations are now higher and so is the bar for future performance.