© Reuters. ServiceNow (NOW) a high AI choose at Macquarie, highlights ‘substantial’ GenAI product potential
ServiceNow (NYSE:) shares are edging greater premarket Tuesday after fairness analysis agency Macquarie raised its value goal for the inventory to $800 from $612, stating it’s now one in every of its high AI picks.
Analysts on the agency offered a number of causes for his or her bullish thesis on NOW, highlighting its “substantial” generative AI product potential. As well as, they famous their pleasure in regards to the Now Help product and the Outerform-rated NOW’s GenAI-driven pipeline.
“We believe ServiceNow’s product strategy embodies our view that differentiated generative AI (GenAI) software will use GenAI as a feature, not as the core product,” mentioned the agency. “We think ‘Now Assist’ GenAI products can make use of core NOW Platform modules (ITSM, CSM, HR, FSM, etc.) more efficient while improving user experience – a potential reflected in ServiceNow signing 4 large GenAI deals in Q3’23 right after general availability of its Vancouver release and reporting a >300 customer pipeline for its GenAI products.”
Moreover, Macquarie believes ServiceNow’s use of smaller, domain-specific generative AI fashions affords two key benefits within the AI arms race, together with higher effectivity and, due to this fact, profitability and the power to maintain buyer information inside the NOW ecosystem.
Analysts on the agency mentioned the pricing uplift from the corporate’s Professional Plus SKUs presents a “substantial mid-term opportunity for ServiceNow to capitalize upon GenAI interest to sustain revenue growth.”
