ServiceNow's revenue growth defies AI fears, with 50% of new sales non-seat-based and bullish outlook.

ServiceNow reported strong Q1 results with subscription revenue up 22% year-on-year, driven by a shift where 50% of new annual contract value (ACV) is now non-seat-based, addressing concerns about AI causing pricing compression in software. This transition supports accelerating growth despite market skepticism, as reflected in a significant valuation gap between bullish and consensus price targets. The company benefits from an expanded addressable market, with industry leaders highlighting the service industry's vast potential compared to software alone. The author values ServiceNow at $150, with a range of $126 to $177 based on future earnings and comparable company multiples, suggesting the market is undervaluing its growth prospects.