NOW Analysis: ServiceNow's $109 Billion SaaS Empire Is Down 51% From Its High — Why the AI Panic Selloff Ignores $4.6 Billion in Free Cash Flow
ServiceNow (NYSE: NOW) has been caught in the crossfire of the 2026 software selloff, plunging from its 52-week high of $211.48 to just $104.27 — a staggering 51% decline that has wiped roughly $115 billion in market capitalisation from one of enterprise software's most dominant franchises. The stock now trades 25% below its 50-day moving average and 41% below its 200-day average, levels that suggest capitulation rather than orderly repricing. Yet the business underneath the stock tells a radically different story. ServiceNow posted $13.3 billion in revenue for fiscal year 2025, up approximately 23% year-over-year, while generating $5.4 billion in operating cash flow and $4.6 billion in free cash flow — both records. The company ended the year with $6.3 billion in cash and investments against just $3.2 billion in total debt, maintaining a net cash position. The disconnect between ServiceNow's operational execution and its stock price creates a compelling analytical case. Unusual options activity — put volume surged 69% above average on February 20 — suggests institutional hedging is intensifying, but for long-term investors willing to look past the AI disruption narrative, NOW's valuation has compressed to levels not seen since the pandemic recovery.