[Digital Today reporter Chi-gyu Hwang (황치규)] UBS on April 10 (local time) downgraded its rating on enterprise software company ServiceNow from buy to neutral. It also cut its price target to $100 from $170.

UBS analyst Karl Keirstead (칼 케이어스테드) said UBS had kept ServiceNow as its only buy-rated application software stock after judging it was in a better position than rivals in the AI era. He said confidence in that view has weakened and instances of pressure on software budgets outside AI are also increasing. He said UBS is adjusting its rating to neutral even though the stock has fallen sharply since the start of the year to about 15 times 2026 free cash flow (FCF).

UBS said it identified three specific concerns in discussions with customers. First, it said customers did not intend to replace ServiceNow as a system of record, but there were cases where they showed interest in using AI to build their own workflow automation apps or to handle service management tickets in an agent-based way.

It also mentioned that the customer support segment was singled out as the area most vulnerable to AI-driven workforce reductions. That could pose a risk to growth in the customer service management (CSM) business, which accounts for about 10 percent of ServiceNow's total revenue. Finally, UBS pointed out that customers have not formed a consensus on using ServiceNow as an agent orchestration layer.