We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
ServiceNow vs. Adobe: Which Cloud Software Stock Has an Edge Now?
Read MoreHide Full Article
Key Takeaways
ServiceNow's AI products are on track to hit $1B in ACV by 2026, boosting its enterprise workflow momentum.
NOW's acquisitions of Armis, Veza and Moveworks expand its AI, security and identity governance capabilities.
Adobe's AI tools like Firefly and Acrobat AI are gaining traction, but face stiff SaaS and AI competition.
ServiceNow (NOW - Free Report) and Adobe (ADBE - Free Report) leverage software-as-a-service (SaaS) technologies to offer software that helps enterprises in transforming their businesses. ServiceNow, through its cloud-based platform, offers AI-powered workflow solutions, while Adobe offers creative software, digital documents, and digital experience platforms. However, NOW or ADBE, which of these cloud software stocks has the greater upside potential? Let’s find out.
The Case for NOW Stock
ServiceNow’s workflows, including technology, ITSM, ITOM, ITAM, security and risk, CRM and industry and core business workflows, continue to gain traction. The company is rapidly gaining traction among enterprises with its ServiceNow AI Platform. Increasing consumption of AI Agent Assist bodes well for NOW’s prospects. ServiceNow’s AI products are expected to surpass $0.5 billion in ACV in 2025, and the company remains on track to achieve $1 billion in 2026.
ServiceNow’s expanding partner base includes the likes of NVIDIA, Microsoft, Figma, Genesys and others. The company has been expanding its portfolio thanks to frequent acquisitions that included the likes of Logik.io, data.world, Moveworks and others in 2025. While Logik.io provided an AI-powered, composable Configure, Price, Quote solution, data.world is a well-known name in enterprise data cataloging and governance. The Moveworks’ acquisition combined ServiceNow’s agentic AI and intelligent workflows with the former’s intuitive front-end AI assistant, enterprise search and agentic Reasoning Engine.
NOW’s Veza acquisition strengthens security and risk portfolios. Veza offers next-generation identity governance capabilities, including access reviews, access requests, centralized access hubs and real-time visibility that legacy tools struggle to deliver. ServiceNow is also expanding its security portfolio with the Armis acquisition. The company will pay a whopping $7.75 billion in cash for Armis, which is a dominant name in cyber exposure management and cyber-physical security across IT, Operational Technology (OT), medical devices and other fields for companies, governments and critical infrastructure (OT, IoT, Cloud and IoMT) worldwide.
The Case for Adobe Stock
Adobe is benefiting from strong demand for AI-powered Creative Cloud Pro and Acrobat, as well as AI-first products, Firefly and Acrobat AI Assistant. Through the new conversational and agentic interfaces in Adobe Reader, Acrobat and Express, ADBE is offering improved experiences to business professionals and consumer groups. Firefly models and applications like Photoshop, Illustrator and Premiere, which integrate third-party models, are gaining traction among Creators and Creative professionals. New solutions like Premiere mobile with YouTube integration and Photoshop mobile are helping creators develop content anywhere.
Adobe is benefiting from an expanding partner base and integrations with leading AI ecosystems, including Amazon Web Services, Azure, Google Gemini, Microsoft CoPilot and OpenAI. Adobe’s Firefly has a rich partner base that includes models from Google, OpenAI, Black Forest Labs, Luma, Runway, Topaz Labs and ElevenLabs. The company has been offering creators a rich set of Gen AI capabilities that allow users to generate with Adobe and partner models. Adobe’s Business Professional and Consumer segment is benefiting from a strong portfolio and an expanding partner base (45 new partners added in the fiscal fourth quarter), including the likes of Bynder, Hootsuite and Sprout Social.
Adobe now targets annualized recurring revenue growth of 10.2% for fiscal 2026, driven by an innovative AI-powered portfolio, the expanding adoption of enterprises and a large market opportunity. However, Adobe’s AI-related revenues are minuscule compared with Microsoft, Alphabet and Salesforce, which has been a concern for Adobe investors.
Price Performance and Valuation of NOW and ADBE
In the trailing 12-month period, NOW shares have lost a whopping 44.3% while Adobe shares have dropped 33.6%.
NOW vs. ADBE: Share Price Performance
Image Source: Zacks Investment Research
NOW shares are overvalued as suggested by a Value Score of F, while ADBE shares are currently cheap, as indicated by a Value Score of B.
In terms of price/sales, NOW trades at 8.24X higher than Adobe’s 4.52X.
NOW vs. ADBE: Valuation
Image Source: Zacks Investment Research
How Do Earnings Estimates Compare for NOW & ADBE?
The Zacks Consensus Estimate for NOW’s 2026 earnings is pegged at $4.03 per share, which has been steady over the past 60 days, indicating a 16.5% rise from 2025’s consensus mark of $3.46 per share.
The Zacks Consensus Estimate for Adobe’s fiscal 2026 earnings is pegged at $23.44 per share, down 9 cents over the past 60 days, indicating an 12% increase over fiscal 2025’s reported figure.
ServiceNow’s robust AI portfolio, strong partner base and acquisitions are expected to drive its clientele. These factors give NOW an edge over Adobe, as the latter suffers from stiff competition in the SaaS and AI domains.
Image: Bigstock
ServiceNow vs. Adobe: Which Cloud Software Stock Has an Edge Now?
Key Takeaways
ServiceNow (NOW - Free Report) and Adobe (ADBE - Free Report) leverage software-as-a-service (SaaS) technologies to offer software that helps enterprises in transforming their businesses. ServiceNow, through its cloud-based platform, offers AI-powered workflow solutions, while Adobe offers creative software, digital documents, and digital experience platforms. However, NOW or ADBE, which of these cloud software stocks has the greater upside potential? Let’s find out.
The Case for NOW Stock
ServiceNow’s workflows, including technology, ITSM, ITOM, ITAM, security and risk, CRM and industry and core business workflows, continue to gain traction. The company is rapidly gaining traction among enterprises with its ServiceNow AI Platform. Increasing consumption of AI Agent Assist bodes well for NOW’s prospects. ServiceNow’s AI products are expected to surpass $0.5 billion in ACV in 2025, and the company remains on track to achieve $1 billion in 2026.
ServiceNow’s expanding partner base includes the likes of NVIDIA, Microsoft, Figma, Genesys and others. The company has been expanding its portfolio thanks to frequent acquisitions that included the likes of Logik.io, data.world, Moveworks and others in 2025. While Logik.io provided an AI-powered, composable Configure, Price, Quote solution, data.world is a well-known name in enterprise data cataloging and governance. The Moveworks’ acquisition combined ServiceNow’s agentic AI and intelligent workflows with the former’s intuitive front-end AI assistant, enterprise search and agentic Reasoning Engine.
NOW’s Veza acquisition strengthens security and risk portfolios. Veza offers next-generation identity governance capabilities, including access reviews, access requests, centralized access hubs and real-time visibility that legacy tools struggle to deliver. ServiceNow is also expanding its security portfolio with the Armis acquisition. The company will pay a whopping $7.75 billion in cash for Armis, which is a dominant name in cyber exposure management and cyber-physical security across IT, Operational Technology (OT), medical devices and other fields for companies, governments and critical infrastructure (OT, IoT, Cloud and IoMT) worldwide.
The Case for Adobe Stock
Adobe is benefiting from strong demand for AI-powered Creative Cloud Pro and Acrobat, as well as AI-first products, Firefly and Acrobat AI Assistant. Through the new conversational and agentic interfaces in Adobe Reader, Acrobat and Express, ADBE is offering improved experiences to business professionals and consumer groups. Firefly models and applications like Photoshop, Illustrator and Premiere, which integrate third-party models, are gaining traction among Creators and Creative professionals. New solutions like Premiere mobile with YouTube integration and Photoshop mobile are helping creators develop content anywhere.
Adobe is benefiting from an expanding partner base and integrations with leading AI ecosystems, including Amazon Web Services, Azure, Google Gemini, Microsoft CoPilot and OpenAI. Adobe’s Firefly has a rich partner base that includes models from Google, OpenAI, Black Forest Labs, Luma, Runway, Topaz Labs and ElevenLabs. The company has been offering creators a rich set of Gen AI capabilities that allow users to generate with Adobe and partner models. Adobe’s Business Professional and Consumer segment is benefiting from a strong portfolio and an expanding partner base (45 new partners added in the fiscal fourth quarter), including the likes of Bynder, Hootsuite and Sprout Social.
Adobe now targets annualized recurring revenue growth of 10.2% for fiscal 2026, driven by an innovative AI-powered portfolio, the expanding adoption of enterprises and a large market opportunity. However, Adobe’s AI-related revenues are minuscule compared with Microsoft, Alphabet and Salesforce, which has been a concern for Adobe investors.
Price Performance and Valuation of NOW and ADBE
In the trailing 12-month period, NOW shares have lost a whopping 44.3% while Adobe shares have dropped 33.6%.
NOW vs. ADBE: Share Price Performance
Image Source: Zacks Investment Research
NOW shares are overvalued as suggested by a Value Score of F, while ADBE shares are currently cheap, as indicated by a Value Score of B.
In terms of price/sales, NOW trades at 8.24X higher than Adobe’s 4.52X.
NOW vs. ADBE: Valuation
Image Source: Zacks Investment Research
How Do Earnings Estimates Compare for NOW & ADBE?
The Zacks Consensus Estimate for NOW’s 2026 earnings is pegged at $4.03 per share, which has been steady over the past 60 days, indicating a 16.5% rise from 2025’s consensus mark of $3.46 per share.
ServiceNow, Inc. Price and Consensus
ServiceNow, Inc. price-consensus-chart | ServiceNow, Inc. Quote
The Zacks Consensus Estimate for Adobe’s fiscal 2026 earnings is pegged at $23.44 per share, down 9 cents over the past 60 days, indicating an 12% increase over fiscal 2025’s reported figure.
Adobe Inc. Price and Consensus
Adobe Inc. price-consensus-chart | Adobe Inc. Quote
Here’s Why NOW Has an Edge Over ADBE
ServiceNow’s robust AI portfolio, strong partner base and acquisitions are expected to drive its clientele. These factors give NOW an edge over Adobe, as the latter suffers from stiff competition in the SaaS and AI domains.
Currently, both ServiceNow and Adobe carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.