What happened: ServiceNow (NOW) stock plunged 17% in early trading on Thursday, fueling a broader sell-off across software stocks. Other software stocks, including Salesforce (CRM), Oracle (ORCL), and Adobe (ADBE), also traded lower.
What’s behind the move: The enterprise software company met first quarter earnings expectations but said the Middle East conflict delayed some subscription sales.
Subscription revenue for the first three months of the year jumped 22% to $3.67 billion. That expansion would have been higher were it not for the impact of the Middle East conflict, the company said.
ServiceNow said it “saw an approximately 75 basis point headwind from delayed closings of several large on-premise deals in the Middle East, due to the ongoing conflict in the region.”
First quarter adjusted earnings came in at $0.97 per share, in line with Wall Street estimates.
What else you need to know: ServiceNow is one of several software stocks that have been trending downward amid concerns about potential disruption from artificial intelligence.
While the company has introduced AI-related initiatives and products across its offerings, that hasn’t been enough to ease the broader selling pressure across the sector. Year-to-date, the stock is down more than 30%.
Earlier this week, ServiceNow finalized its $7.75 billion purchase of cybersecurity startup Armis.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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