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NOW Broadens Aramco AI Footprint as CRM & MSFT Expand AI Ambitions
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Key Takeaways
ServiceNow's Aramco pact expands AI workflow opportunities across more than 50 countries.
NOW's AI ACV topped $1 billion in Q2 2026, with net new AI ACV up over 40% sequentially.
ServiceNow faces growing AI workflow competition from Salesforce and Microsoft.
ServiceNow (NOW - Free Report) announced yesterday that it signed a collaboration agreement with Aramco Digital to advance artificial intelligence (AI)-powered enterprise transformation across the broader Aramco ecosystem. Aramco Digital plans to use the ServiceNow AI Platform to standardize and govern digital workflows across its affiliates, subsidiaries and joint ventures spanning more than 50 countries. The collaboration broadens NOW’s opportunity across AI automation, customer experience, shared services and enterprise resource planning (ERP) modernization. It could also strengthen ServiceNow’s competitive position against Salesforce (CRM - Free Report) and Microsoft (MSFT - Free Report) as enterprises increasingly seek unified platforms for AI governance, workflow automation and business transformation.
The collaboration should deepen ServiceNow’s presence across a large and complex enterprise environment. The ServiceNow AI Platform integrates data, AI, workflows and security across Technology, Core Business, CRM and Industry, and Creator workflows. Its single data fabric and integrated data layer are designed to connect fragmented systems and streamline processes across departments. Wider adoption across the Aramco ecosystem could therefore create opportunities for ServiceNow to attach additional AI, workflow, data, security and automation products as deployments expand across business functions.
ServiceNow’s open architecture could further strengthen its prospects within Aramco’s diverse technology landscape. AI Control Tower is designed to discover, govern and manage AI agents and systems across heterogeneous environments instead of limiting governance to ServiceNow technologies. The company has introduced Action Fabric, which enables NOW and third-party AI systems to securely execute actions through ServiceNow workflows. Context Engine and Autonomous Data Analytics provide governed enterprise information that autonomous agents can use to make decisions and complete tasks. These capabilities could position NOW as a common orchestration layer across Aramco’s multiple applications, AI models and business systems.
The agreement complements ServiceNow’s accelerating AI adoption. ServiceNow AI annual contract value (ACV) crossed $1 billion in the second quarter of 2026, while net new AI ACV increased more than 40% sequentially. Deals containing five or more ServiceNow AI products grew 5.5 times year over year and the number of customers with Agentic AI in production increased ninefold over nine months. Subscription revenues rose 24.5% year over year to $3.88 billion, while current Remaining Performance Obligations (cRPO) and Remaining Performance Obligations (RPO) reached $13.2 billion and $29 billion, respectively. Successful expansion within Aramco could support cross-selling and longer-term subscription commitments.
NOW Faces Tough Competition
Salesforce is pushing aggressively into areas traditionally associated with ServiceNow. Agentforce annual recurring revenues (ARR) reached $1.5 billion in the second quarter of fiscal 2027, while accounts with agents in production increased 70% sequentially. Notably, Agentforce IT Service already has more than 450 customers, including conversions from ServiceNow. CRM is expanding into back-office and supply-chain automation through Agentforce Ops. Its broader platform architecture combines AI, data, integration and business applications across sales, service, marketing, analytics, supply chain and IT service workflows, giving Salesforce a platform that increasingly overlaps with NOW’s enterprise workflow ambitions.
Microsoft poses a significant challenge through its extensive enterprise AI ecosystem. Agent 365 has nearly 40 million agents registered across tens of thousands of companies, while Microsoft 365 Copilot has more than 30 million paid seats. Dynamics 365 exposes more than 650,000 model context protocol (MCP) actions across sales, finance, supply chain, HR and customer service, enabling agents to operate using existing business data, permissions, security controls and audit trails.
Shares of ServiceNow have declined 6.7% year to date against the broader Zacks Computer and Technology sector’s 16.8% growth.
NOW’s Stock Price Performance
Image Source: Zacks Investment Research
NOW stock is trading at a premium, with a forward 12-month price-to-earnings ratio of 30.55 compared with the broader sector’s 20.65. ServiceNow has a Value Score of D.
NOW’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NOW’s earnings is currently pegged at $1.03 per share, unchanged over the past 30 days, suggesting 7.29% year-over-year growth.
View the Zacks #1 Rank List
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NOW Broadens Aramco AI Footprint as CRM & MSFT Expand AI Ambitions
Key Takeaways
ServiceNow (NOW - Free Report) announced yesterday that it signed a collaboration agreement with Aramco Digital to advance artificial intelligence (AI)-powered enterprise transformation across the broader Aramco ecosystem. Aramco Digital plans to use the ServiceNow AI Platform to standardize and govern digital workflows across its affiliates, subsidiaries and joint ventures spanning more than 50 countries. The collaboration broadens NOW’s opportunity across AI automation, customer experience, shared services and enterprise resource planning (ERP) modernization. It could also strengthen ServiceNow’s competitive position against Salesforce (CRM - Free Report) and Microsoft (MSFT - Free Report) as enterprises increasingly seek unified platforms for AI governance, workflow automation and business transformation.
The collaboration should deepen ServiceNow’s presence across a large and complex enterprise environment. The ServiceNow AI Platform integrates data, AI, workflows and security across Technology, Core Business, CRM and Industry, and Creator workflows. Its single data fabric and integrated data layer are designed to connect fragmented systems and streamline processes across departments. Wider adoption across the Aramco ecosystem could therefore create opportunities for ServiceNow to attach additional AI, workflow, data, security and automation products as deployments expand across business functions.
ServiceNow’s open architecture could further strengthen its prospects within Aramco’s diverse technology landscape. AI Control Tower is designed to discover, govern and manage AI agents and systems across heterogeneous environments instead of limiting governance to ServiceNow technologies. The company has introduced Action Fabric, which enables NOW and third-party AI systems to securely execute actions through ServiceNow workflows. Context Engine and Autonomous Data Analytics provide governed enterprise information that autonomous agents can use to make decisions and complete tasks. These capabilities could position NOW as a common orchestration layer across Aramco’s multiple applications, AI models and business systems.
The agreement complements ServiceNow’s accelerating AI adoption. ServiceNow AI annual contract value (ACV) crossed $1 billion in the second quarter of 2026, while net new AI ACV increased more than 40% sequentially. Deals containing five or more ServiceNow AI products grew 5.5 times year over year and the number of customers with Agentic AI in production increased ninefold over nine months. Subscription revenues rose 24.5% year over year to $3.88 billion, while current Remaining Performance Obligations (cRPO) and Remaining Performance Obligations (RPO) reached $13.2 billion and $29 billion, respectively. Successful expansion within Aramco could support cross-selling and longer-term subscription commitments.
NOW Faces Tough Competition
Salesforce is pushing aggressively into areas traditionally associated with ServiceNow. Agentforce annual recurring revenues (ARR) reached $1.5 billion in the second quarter of fiscal 2027, while accounts with agents in production increased 70% sequentially. Notably, Agentforce IT Service already has more than 450 customers, including conversions from ServiceNow. CRM is expanding into back-office and supply-chain automation through Agentforce Ops. Its broader platform architecture combines AI, data, integration and business applications across sales, service, marketing, analytics, supply chain and IT service workflows, giving Salesforce a platform that increasingly overlaps with NOW’s enterprise workflow ambitions.
Microsoft poses a significant challenge through its extensive enterprise AI ecosystem. Agent 365 has nearly 40 million agents registered across tens of thousands of companies, while Microsoft 365 Copilot has more than 30 million paid seats. Dynamics 365 exposes more than 650,000 model context protocol (MCP) actions across sales, finance, supply chain, HR and customer service, enabling agents to operate using existing business data, permissions, security controls and audit trails.
NOW’s Share Price Performance, Valuation & Estimates
Shares of ServiceNow have declined 6.7% year to date against the broader Zacks Computer and Technology sector’s 16.8% growth.
NOW’s Stock Price Performance
Image Source: Zacks Investment Research
NOW stock is trading at a premium, with a forward 12-month price-to-earnings ratio of 30.55 compared with the broader sector’s 20.65. ServiceNow has a Value Score of D.
NOW’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NOW’s earnings is currently pegged at $1.03 per share, unchanged over the past 30 days, suggesting 7.29% year-over-year growth.
ServiceNow, Inc. Price and Consensus
ServiceNow, Inc. price-consensus-chart | ServiceNow, Inc. Quote
ServiceNow stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.