ServiceNow recently expanded its collaboration with Coforge Limited to establish the GenAI Center of Excellence in India, seeking to leverage AI for improved business operations and customer experience. Despite this development, ServiceNow’s shares fell 6.6% last week. This decline occurred alongside the wider tech sector downturn, where major indices like the Nasdaq fell 3.7% amid fears over economic policies and broader market volatility. Additionally, the introduction of ServiceNow's AI agents for telecom may yet to show significant impact amid market concerns. The overall tech market's struggles, evident in losses faced by other tech giants, contributed notably to ServiceNow's price decline. The market's overall 1.7% drop in the same period further highlights external pressures that affected ServiceNow's share performance, reflecting broader investor sentiment affected by policy uncertainties.

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ServiceNow has experienced remarkable total shareholder returns of 220.47% over the past five years. This performance is attributed to several impactful developments throughout this period. Notably, its earnings grew significantly at an average of 34% per year, which aligns with its revenue growth projections that exceeded the US market average. Among the highlights are ServiceNow’s strategic partnerships, such as its alliances with Qualtrics and Deloitte since 2021, which fostered digital transformation and enhanced service delivery. Additionally, the completion of substantial share buybacks totaling US$1.23 billion further reinforced investor confidence.

ServiceNow's position within the US Software industry over the past year was further elevated, with returns surpassing the industry’s modest 3.7% gain. While its Price-To-Earnings Ratio remains higher than peers, reflecting its growth potential, recent collaborations, like with SoftwareOne and Cogizant, continue to fuel expectations for positive momentum. Collectively, these initiatives have shaped ServiceNow as a leader in IT modernization and AI-driven solutions, contributing to its robust five-year return.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include NYSE:NOW.

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