ServiceNow Surges 6% After AI Agent Launch, TD Cowen Target Hike and Decagon Acquisition Denial

ServiceNow shares climbed 6.15% on October 15, adding roughly $7.3 billion in market capitalization, as three catalysts converged: a raised analyst price target, a pair of new AI product announcements, and the company's flat denial of reported interest in acquiring startup Decagon. The stock reached approximately $146 per share, outperforming a broadly mixed market session in which the S&P 500 gained only 0.33% and the Nasdaq added 0.08%.

TD Cowen analyst Derrick Wood raised his price target on ServiceNow to $165 from $140 while reiterating a Buy rating. Wood cited an expectation of strong third-quarter results, pointing to customer upgrade activity, growth in the company's security products, and rising demand from US federal agencies as the primary drivers behind the more bullish outlook.

On the product front, ServiceNow launched AI Passport, a governance framework for enterprise AI agents, alongside a suite of tools enabling employees to build their own AI agents within the platform. Nvidia CEO Jensen Huang weighed in publicly, saying the market had gotten it wrong on ServiceNow, lending additional momentum to the session's move. Options activity was notably elevated, with 96,914 contracts trading in NOW, representing approximately 9.7 million underlying shares, or about 91.6% of typical volume.

Broader rotation dynamics also worked in ServiceNow's favor, as investors moved money out of debt-laden AI names and into established enterprise software, lifting Salesforce by 4% as well. Analysts and commentators have noted ServiceNow's workflow automation footprint and high customer retention as competitive advantages that would be difficult to replicate, particularly as AI-driven software development lowers barriers to entry elsewhere in the sector. ServiceNow has been expanding its top line at a faster year-over-year rate than Salesforce, even though Salesforce generates higher total revenue in absolute terms.