ServiceNow (NOW 2.29%) stock is moving higher in Tuesday's trading. The software specialist's share price was up 1.9% as of 2:30 p.m. ET, and been up as much as 3.1% earlier in the day.

Two investment firms updated their valuation forecasts for ServiceNow today and lowered their respective price targets on the stock. But despite the downward forecast revisions, investors are buying shares because the new targets still suggest significant upside potential.

Two analyst firms stay bullish on ServiceNow despite target cuts

In new coverage issued before the market opened today, Oppenheimer lowered its price target on ServiceNow stock from $1,200 per share to $970 per share. The firm's analysts expect the business to post solid Q1 reports that have the potential to beat Wall Street's expectations, but they see macroeconomic and geopolitical risk factors leading to weaker demand in the enterprise software market.

Bank of America also cut its price forecast on ServiceNow today, lowering its target from $1,280 per share to $1,025 per share. On the other hand, the firm still maintained an outperform rating on the stock and expects that year-over-year growth for remaining performance obligations (RPO) for the first quarter will be in line with its previous target of 20.5%. But the analysts see a softer demand outlook further out and cut their RPO growth targets for the full year from 21% to 19.5% on a constant-currency basis.

What's next for ServiceNow?

As of this writing, Oppenheimer's new price target for ServiceNow suggests additional upside of roughly 19%. Meanwhile, hitting BofA's new target would mean a roughly 26% jump above the software specialist's current valuation level.

Macroeconomic and geopolitical risks could create business-specific headwinds for ServiceNow and create valuation pressures that impact the broader market, but the company's strength in enterprise artificial intelligence (AI) software suggests the stock could still be a big long-term winner.