Will ServiceNow's OpenAI Partnership Boost the Stock?
Here's our early take on the announcement as we await more details when the company reports earnings next week.
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When we added to the Pro Portfolio’s position in ServiceNow (NOW) last week, we noted the shares were oversold, and based on the current relative strength index level of $18.37, that condition has become even more so. In the past with NOW, in times like this, when sentiment is, in a word, horrible, it has only taken a modest amount of good news to stimulate a rebound in the shares.
This time around, it has to do with ServiceNow inking a three-year deal with OpenAI to use its intelligence models to offer AI agents to customers. As part of the deal, ServiceNow will integrate GPT-5.2 into its enterprise workflow platform and create AI voice technology harnessing these models. While specific terms of the relationship were not announced, it appears there will be some sort of revenue relationship between OpenAI and ServiceNow.
In some respects, this move by ServiceNow isn’t too dissimilar from Apple (AAPL) tapping Google’s (GOOGL) Gemini model for its revamped AI-enabled Siri. By that, we mean, by leveraging OpenAI’s models, ServiceNow doesn’t have to develop its own or its AI agents from the ground up. For OpenAI, it’s leveraging ServiceNow to expand its enterprise revenue stream, a positive as OpenAI moves down the path for an eventual IPO. That would be a nice development considering the investments in OpenAI made by Nvidia (NVDA) , Microsoft (MSFT) , SuRo Capital (SSSS) , and potentially Amazon (AMZN) .
Similar to our comment about ServiceNow’s back-to-back cybersecurity acquisitions, we expect more details on its OpenAI relationship when the company reports next week.
At the time of publication, TheStreet Pro Portfolio was long NOW, AAPL, GOOGL, NVDA, MSFT, SSSS and AMZN.
