ServiceNow shares slump nearly 20% after results as AI software selloff deepens
The software company grew revenue 20.5% to $4.11 billion but narrowly missed profit forecasts. Its shares fell about 19% in premarket trading, while Fortinet sank about 25%.
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ServiceNow reported third-quarter results after the U.S. market close on Wednesday, with revenue rising 20.5% from a year earlier to $4.11 billion, slightly ahead of expectations. Adjusted earnings per share of $1.00 narrowly missed analysts' estimate of $1.02.
The shares fell about 17% in after-hours trading and were down roughly 19% in U.S. premarket trading on Thursday, Reuters reported. SiliconANGLE said the company's fourth-quarter revenue forecast also fell short of analyst estimates. Other software stocks were hit as well, with Fortinet down about 25% premarket after its own results.
Chief Executive Bill McDermott pointed to the company's artificial intelligence business, which ServiceNow expects to reach at least $1.7 billion in annual contract value by year-end. "We have tangible AI monetization," McDermott told analysts on the earnings call.