ServiceNow shares have fallen roughly 60% from their prior highs as investors worry that artificial intelligence could disrupt the enterprise software market. But the company's first-quarter results told a different story about its current business, and a high-profile collaboration with Nvidia is drawing attention to its long-term strategy.
According to a report by Yahoo Finance, subscription revenue in the first quarter grew 19% year over year to nearly $3.7 billion on a constant-currency basis. That result beat expectations and led management to raise its full-year outlook. ServiceNow now expects full-year subscription revenue, adjusted for currency changes, to increase between 20.5% and 21%.
A significant portion of that growth is coming from Now Assist, the company's flagship AI product. Now Assist is generating $1 billion in annual revenue and is on track to reach $1.5 billion by year-end. The product is being integrated into ServiceNow's automation engine, called Action Fabric, which the company describes as the AI brain behind tasks running across its platform.
Customer adoption has expanded well beyond early experimentation. In 2025, 91% of net new annual contract value came from deals that included five or more products, spanning areas like app development, sales management, and security. That level of cross-platform expansion suggests customers are treating ServiceNow as a core part of their technology infrastructure rather than a single-purpose tool.
The company has also moved to strengthen its position in the market for AI agents, which are software systems capable of completing tasks autonomously. At ServiceNow Knowledge 2026, Nvidia CEO Jensen Huang appeared on stage with ServiceNow CEO Bill McDermott. The two companies unveiled Project Arc, an autonomous desktop agent built for IT administrators and developers. Project Arc will run on Nvidia's hardware, models, domain-specific skills, and software.
The joint announcement positions ServiceNow as a potential orchestration and governance layer for AI agents operating across large enterprises. The collaboration with Nvidia, the dominant supplier of AI chips, adds credibility to that positioning at a time when many investors remain uncertain about which software companies will benefit most from the AI buildout.
The gap between ServiceNow's current stock price and its recent highs reflects broader investor anxiety about AI's long-term effect on enterprise software spending. Some analysts believe AI tools could allow companies to automate tasks that currently require expensive software licenses, squeezing revenue for established vendors. ServiceNow's management has pushed back on that framing, describing the platform as the operating system that will control, secure, and monitor AI agents rather than a product that AI will replace.
