ServiceNow Shares Plunge 27% in Record One-Day Drop as Q3 Results Spark Fresh AI Disruption Fears

ServiceNow (NOW-US) shares fell 26.95% on Thursday, the company's largest single-day decline on record, after the enterprise software maker's third-quarter results fell short of expectations and revived concerns that AI could disrupt the traditional software industry. Third-quarter revenue rose more than 20% year over year to $4.11 billion, roughly in line with the $4.1 billion analysts surveyed by LSEG had expected. Adjusted earnings per share came in at $1, below the $1.02 consensus. Citi analyst Tyler Radke said the results were "a bit unusual" by ServiceNow's standards, mainly because the beat was not large enough. The report failed to ease recent fears of a "SaaSpocalypse" — worries that new AI capabilities could upend traditional software business models. Even a slight raise to full-year 2026 subscription revenue guidance, to $15.78 billion to $15.79 billion, failed to stem the selloff. Average new AI contract value jumped 65%. Radke said investors were also unsettled by the company's investment in a new "forward-deployed engineering team," which embeds staff at customer sites to build AI solutions, without immediate results. He said a real growth inflection may not come until next year.