ServiceNow's stock plummeted 5.46% during intraday trading on Thursday, as the software company faced significant downward pressure.

The decline came amid broad-based selling pressure across the software sector, compounded by news that Meta Platforms plans to begin producing its own AI chips starting in September. Reports of Meta's self-developed AI chip initiative intensified investor concerns over a potential shift in the AI competitive landscape, triggering concentrated selling in software names including ServiceNow. The company, which provides enterprise workflow automation powered by AI-driven applications, saw its stock weighed down by fears that big tech's vertical integration into AI hardware could reshape industry dynamics and threaten software providers' positioning in the AI value chain.

Notably, positive developments including ServiceNow's partnership with Hitachi Digital Services for AI-powered infrastructure monitoring and Truist Securities raising its price target on the stock to $130 from $120 while maintaining a buy rating failed to offset the sector-wide selling pressure driven by competitive concerns.