ServiceNow's stock surged 5.01% during intraday trading on Tuesday, as the AI application software company experienced significant buying interest.

The rally was driven by a broad sector-wide advance among AI software stocks, with market sentiment shifting to recognize that artificial intelligence applications are generating incremental demand in areas like cybersecurity rather than entirely displacing traditional software services. This alleviated prior fears of rapid market cannibalization by AI giants.

Adding to the positive momentum, Guggenheim upgraded ServiceNow from neutral to buy with a $125 price target, while Benchmark also raised its target to $130, maintaining a buy rating. Furthermore, analysts noted capital rotation into AI-related hyperscale data center operators as investors shift funds from semiconductor stocks to lagging names in the AI ecosystem.