ServiceNow NOW Stock Price Rally Potential as RPA Market Explodes: What Investors Need to Know

The Automation Boom is Here

The robotics and automation sector is poised for explosive growth. Grand View Research projects the robotic process automation market will expand at a 43.9% compounded annual growth rate through 2030, reaching a $30.85 billion valuation—representing a 466% increase from 2026 onwards. This trajectory suggests significant opportunities for companies positioned to capitalize on the shift toward AI-powered automation and process optimization.

Within this booming landscape, one name stands out: ServiceNow (NYSE: NOW). The company has emerged as a leader in GenAI-powered chatbot solutions for enterprises, but recent developments have created both opportunity and concern among investors monitoring NOW stock price movements.

Why ServiceNow Commands Attention in the Automation Era

ServiceNow’s core business revolves around delivering intelligent, conversational chatbots powered by generative AI to enterprise clients. Unlike traditional scripted chatbots, these AI systems continuously learn from interactions, improving their ability to handle customer support inquiries and streamline internal workflows without human intervention.

The company’s financial foundation is remarkably solid. In Q3 2025, ServiceNow reported $3.4 billion in revenue, up 22% year-over-year, with subscription revenue comprising $3.3 billion or 97% of total sales. This recurring revenue model provides predictable cash flows and reduces business volatility.

Customer loyalty metrics are equally impressive. ServiceNow maintains a 97% renewal rate among its enterprise customer base—a figure that would reach 98% excluding the loss of a major U.S. federal agency client. This stickiness reflects how deeply embedded ServiceNow has become in enterprise operations.

A Dominant Position Across Enterprises

ServiceNow’s customer roster underscores its market dominance. The company serves nearly 8,400 businesses, including approximately 85% of the Fortune 500. In Q3 2025 alone, ServiceNow closed 103 transactions exceeding $1 million in net new annual contract value, and ended the quarter with 553 customer contracts valued at over $5 million each—an 18% year-over-year increase.

This concentration of blue-chip clients and the recurring nature of service agreements position ServiceNow as a stable player even amid market turbulence. The NOW stock price has demonstrated this resilience, appreciating roughly 1,000% over the past decade.

The Acquisition Strategy Raises Questions

Despite strong fundamentals, ServiceNow’s recent moves have created investor skepticism. The company announced a $7.75 billion acquisition of cybersecurity firm Armis, a deal that sparked immediate market reaction—shares plunged 11% on announcement day. The concern: does cybersecurity align with AI chatbot capabilities, or does this represent a departure from core competencies?

This acquisition followed the Moveworks purchase, another expensive deal aimed at expanding the company’s AI automation suite. Critics argue that relying heavily on acquisitions to drive growth suggests the underlying business may be decelerating. Q3’s 22% revenue growth, while respectable, trails prior year performance metrics. Net income growth of just 16% year-over-year raises questions about margin expansion potential.

Balanced Perspective: The Path Forward

ServiceNow presents a paradox. On one hand, the company boasts fortress-like customer relationships, predictable subscription revenue, and exposure to an accelerating automation trend. The $11.35 billion in remaining performance obligations provides visibility into future cash generation.

On the other hand, moderating growth rates and the aggressive acquisition strategy suggest management may be facing organic growth headwinds. Whether these deals unlock synergies and reignite expansion remains an open question.

For investors evaluating NOW stock price entry points, the decision hinges on conviction in management’s acquisition strategy and belief that AI bot demand will accelerate sufficiently to absorb these investments productively. ServiceNow isn’t a speculative play—it’s a mature company with proven market position. But it’s also a company in transition, testing whether external growth can supplement internal momentum.

The automation megatrend should benefit ServiceNow materially over time, but near-term execution on recent acquisitions will likely determine investor sentiment in the coming quarters.