ServiceNow’s OT Security Push Adds Fuel to a Blistering May Rally

ServiceNow’s new “OT Control Tower” platform, developed jointly with EY, is targeting a market the company has barely touched: operational technology security. The six-module suite — spanning visibility, vulnerability management, risk assessment, compliance, service management and AI-driven operations — builds on recent acquisitions of Veza and Armis, and positions the software group to compete in a field where industrial plant owners are increasingly demanding real-time threat detection. The news, unveiled in a June 12 webcast co-hosted with EY, arrived just as ServiceNow shares were finishing their strongest month on record.

May 2026 saw the stock surge 40.8%, its biggest monthly gain since the 2012 initial public offering. The rally accelerated on the last trading day, when the shares jumped 14.4% to close at $124.37. That marked a sharp reversal from earlier in the month, when the stock had lost nearly 40% of its value from the 52-week high of $211.48. The turnaround was ignited by first-quarter results: revenue climbed 22.1% to $3.77 billion, leasing revenue accounted for $3.7 billion of that total, and remaining performance obligations — a forward-looking metric that points to future billings — hit $12.64 billion, up 22.5% year over year.

The recovery has not silenced skeptics. Jim Cramer praised CEO Bill McDermott on June 1 but warned that software stocks may have limited upside relative to hardware plays such as Dell Technologies, which recently rallied 32.8% on direct AI infrastructure demand. Several sell-side analysts also remain cautious. Following the Q1 report, BMO and Needham cut their price targets to $115, triggering an 18-day slide. Bank of America, however, stuck with a $130 target and a “Buy” rating, and the consensus among analysts is “Moderate Buy” with an average price objective of $141.85. The stock currently trades around $124.56, up 14% from the post-earnings low but still well below its peak.

Should investors sell immediately? Or is it worth buying ServiceNow?

Institutional conviction appears to be strengthening. Railway Pension Investments boosted its stake by 460% to roughly 1.03 million shares, while Nomura Asset Management increased its holding by 362% to about 810,000 shares. Titan Global Capital Management also added to its position late last year. Regulatory filings also revealed that Donald Trump invested between $1 million and $5 million in ServiceNow, a relatively minor holding that nonetheless signals high-profile interest. Institutions now own 87.18% of the company’s shares.

The bull case rests on structural changes to ServiceNow’s business model. Half of new contracts are usage-based rather than subscription-based, a shift that cushions the impact of any AI-driven reduction in traditional SaaS seat licenses. The company’s own AI product, Now Assist, is on track to reach an annual contract value of $1.5 billion by the end of 2026. Customer retention hovers between 97% and 98%, a statistic that underlines the platform’s stickiness. And the partner ecosystem — Deloitte, KPMG, Capgemini, Cognizant and now EY — provides distribution into 85% of the Fortune 500, whose combined 7,700-plus organizations use the software.

Even after the May explosive, technical indicators suggest the shares are overbought, which could amplify volatility in the coming weeks. A $5 billion share repurchase programme, already underway, offers a floor. The OT Control Tower launch, meanwhile, gives investors a fresh narrative to watch — one that ties ServiceNow’s AI ambitions directly to industrial security, a market that is only beginning to digitise.

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