A stock split doesn’t change the underlying fundamentals of a business, but its a signal of confidence from management and the board.

This software company is growing AI services quickly, producing strong growth in contract values.

The stock is arguably expensive, but the growth potential remains strong.

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Few trends have been as important to the stock market over the last 25 years as the growth of artificial intelligence (AI). AI stocks have been the driving force behind the S&P 500’s gains for the last three years. As more and more companies look to incorporate generative AI into their operations, investors are already pricing in the potential productivity gains and earnings growth from the new technology.

As a result, many companies with a focus on AI have seen their stock prices soar. That resulted in a flurry of notable stock splits in 2024 to bring share prices back down to levels digestible by retail investors. 2025, however, has been relatively quiet.

But as we approach the final stretch of the year, ServiceNow (NYSE: NOW) announced a 5-for-1 stock split alongside its third-quarter earnings report. The split will be the company’s first since its IPO in 2012 and comes after a spectacular 1,000% gain in the share price over the last decade.

Despite the strong price performance, ServiceNow stock could sill be worth buying for your portfolio right now, according to Wall Street.

Image source: Getty Images.

ServiceNow was quick to integrate generative AI capabilities into its software suite focused on automating workflows in IT, HR, customer service, finance, and operations.

At the start of the year, management set a goal of $500 million in net new annual contract value (ACV) this year for its Now Assist suite. The software embeds generative AI features across various ServiceNow software packages supporting tasks like email and chat replies, incident summaries, and improving productivity with its software via natural language interactions. Management said it’s now on pace to exceed that goal, and it’s making excellent progress toward $1 billion in ACV for 2026.

Likewise, its AI Control Tower, which automates AI workflows across its software, saw its deal volume quadruple year over year in the third quarter. Management expects strong growth from the platform and suggested it’s at an inflection point where growth could accelerate going forward.

Of course, these new AI services are built on top of a broad suite of very powerful and popular enterprise software. ServiceNow has successfully run the land-and-expand strategy, starting with its core IT services and IT operations suites and upselling customers on additional software.