ServiceNow shares have tumbled 35% so far in 2026 as the market frets that artificial intelligence will make enterprise software obsolete, a sell-off intensified by the release of Anthropic’s Claude Cowork assistant. Bulls argue the reaction is a knee-jerk panic that misunderstands the company’s fundamental value, noting that ServiceNow serves 85% of the Fortune 500 and provides deep product expertise, round-the-clock customer service, constant patching, security upgrades, and enterprise integration infrastructure that cannot be easily replicated. Some recent reports indicate that companies including Microsoft have found that using AI tokens at scale is not actually cheaper than employing humans, contradicting the pessimistic thesis and suggesting AI may enhance rather than replace the value of enterprise software firms. Burke Wealth Management noted in its first-quarter 2026 investor letter that enterprise software valuations are at 10-year lows and that the prevailing viewpoint is that AI will obviate the need for legacy subscriptions, but the firm has tried to manage through the downturn.
ServiceNow IncStock plunged 35% on fears AI will make enterprise software obsolete, intensified by Anthropic's Claude Cowork assistant.
Microsoft CorporationRelease of Claude Cowork assistant is cited as intensifying the sell-off in ServiceNow, implying competitive threat.