ServiceNow's stock soars to a historic month as AI fears fade across software

By Christine Ji

ServiceNow shares gained over 40% this month, leading an industrywide relief rally among enterprise software companies

ServiceNow shares jumped 14% on Friday, giving the workflow-software company its best monthly performance since available data going back to 2012.

ServiceNow looks to be erasing the memory of the artificial-intelligence-fueled software selloff, as shares of the workflow-management company logged a record monthly performance - taking other software peers higher as well.

ServiceNow (NOW) shares surged 14.4% on Friday, notching their third consecutive day of gains. The stock climbed 40.8% in May, booking its best monthly performance since going public in June 2012, according to Dow Jones Market Data.

It's a dramatic reversal after a brutal selloff earlier this year. Shares of ServiceNow are still down nearly 19% this year to date - they tumbled over 42% in the first four months of 2026 - on fears of AI disrupting traditional enterprise software businesses. But investor optimism has been slowly seeping back into ServiceNow and select software stocks in general. Early last week, ServiceNow shares recorded their best day in a year, and Bank of America analyst Tal Liani reinstated coverage of the stock with a buy rating.

ServiceNow's AI Control Tower platform provides centralized governance and management of autonomous AI agents across the enterprise, which Liani called a "mission-critical" role in organizations.

Read: ServiceNow's stock notches best day in a year - flashing a green light for the software sector

The overall software sector has seen a broad recovery, as the iShares Expanded Tech-Software Sector ETF IGV rallied 6.3% on Friday and surged more than 21% in May.

Investors are likely recognizing the importance of data ecosystems in the age of AI, according to Tejas Dessai, director of research at Global X.

"On one hand, you scale AI and you provide more data and information. On the other hand, you protect that by spending more on systems that can allow you to do that," Dessai told MarketWatch. "The whole data ecosystem, data-infrastructure ecosystem and cybersecurity together are phenomenal thematic opportunities to play the AI cycle."

Encouraging news from software peers like Snowflake (SNOW) and Okta (OKTA) this week has also contributed to a broader software revival. Shares of Snowflake have popped nearly 46% since reporting strong earnings after Wednesday's close that showed increasing AI-driven demand for the company's core data-platform business.

See more: Snowflake's stock blasts off, fueled by AI acceleration and deeper Amazon partnership

Shares of identity-management company Okta gained over 30% on Friday following an earnings beat - part of a broader trend of cybersecurity stocks benefiting from AI as the technology increases the need for security platforms.

Adding further fuel to the software sector's relief rally, Salesforce's shares (CRM) surged 8.5% Friday, reversing declines seen after the enterprise software giant's own earnings report Wednesday.

-Christine Ji

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05-29-26 1724ET