ServiceNow could fall even farther as software stocks spiral due to artificial intelligence disruption risks, even though the company once seemed immune to threats posed by AI, according to UBS. The investment bank downgraded ServiceNow to neutral from buy. It also lowered its price target on shares to $100 from $170. “To date, our view has been that ServiceNow is better-positioned for this AI era relative to other application software firms… [but] given that our confidence in that view has weakened and we’re hearing more anecdotes of non-AI apps software budget pressure, we’re moving to a Neutral rating,” UBS analyst Karl Keirstead said Thursday in a note to clients. ServiceNow shares are down 41% this year, leading a broader slump in software that has persisted despite a relief rally in U.S. stocks this week. The iShares Expanded Tech-Software Sector ETF (IGV) is off by 27% this year, with the latest hit this week coming from the release of a new Anthropic agentic tool. Those losses could mount if those companies’ clients begin to curb their non-AI software spending, according to UBS. “Beginning in December, we began hearing [Fortune 500] enterprises and partners express a view that because AI and the associated data and infrastructure spend were expected to inflect in 2026, spending on non-AI or core software spend was now under greater pressure,” Keirstead wrote. “We’d estimate that over half our enterprise customer calls these days include some anecdotes of containing non-AI spend.” ServiceNow shares were down another 2% in premarket trading Friday on the UBS call. UBS’ call goes against consensus on Wall Street. Of the 49 analysts covering ServiceNow, 45 have a buy or strong buy on the stock despite this year’s sell-off
