Eben@CANSLIM ResearchDeutsche Bank has reiterated its Buy rating on ServiceNow (NYSE: NOW) and raised its price target to $155 from $135, citing a higher market multiple for software. The call follows a multi-day series of European investor meetings with ServiceNow President and CFO Gina Mastantuono and SVP, Head of Investor Relations & Market Insights Darren Yip. Management argued that ServiceNow is the enterprise platform for transformation in the AI era, and that AI adoption will not push gross margins below 80%.
Key Takeaways
- Deutsche Bank raised its price target on ServiceNow (NOW) to $155 from $135 while reiterating a Buy rating, with the shares at $138.47 as of 17 September 2026.
- ServiceNow management said AI model inference accounts for less than 10% of its cost to serve, supporting confidence that gross margins stay above 80%.
- ServiceNow’s new Foundation, Advanced and Prime packaging tiers are producing uplifts of roughly 20-30%, and consumption could generate about 4.5-5x the ACV of the corresponding seat-based productivity opportunity.
- ServiceNow’s security and risk portfolio, including AI Control Tower, Armis and Veza, is now a $2bn+ business, with recent acquisitions beating initial expectations.
- ServiceNow plans to launch a product-led, AI-native offering in the back half of the year aimed at the down-market, broadening its addressable market.
What Deutsche Bank’s European Meetings Concluded
In a report titled “Takeaways from European Investor Meetings,” Deutsche Bank analyst Brad Zelnick, alongside Bhavin Shah, Chris Fountain and Nick Giovacchini, writes that management “struck a confident tone” across a multi-day series of investor meetings in Europe. The team came away with a better appreciation of ServiceNow’s position to capture growing enterprise AI spend, its ability to hold 80%+ gross margins, and the forthcoming TAM expansion from a new AI-native product.
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