MW ServiceNow CEO looks to call a bottom on software stocks with this $3 million move

By Christine Ji

As the software selloff deepens, ServiceNow's CEO is buying the dip and joining others at his company in ending automated stock-selling plans

Shares of ServiceNow were down 3% on Tuesday.

ServiceNow CEO Bill McDermott is showing his conviction in his company's stock after it got swept up it a broader software-sector selloff.

McDermott disclosed plans to buy $3 million in shares on Feb. 27, according to a Tuesday SEC filing. He and four other ServiceNow (NOW) executives have also terminated their automated stock-selling plans.

The purchase intent from McDermott "appears to be one of the first notable insider buying signals across the software sector," Evercore ISI analyst Kirk Materne wrote in a Tuesday morning note.

The announcement is a "clear and deliberate vote of confidence from management," Materne added. However, the positive stock impact was short-lived: Shares initially rose 4% on Tuesday before reversing course to trade down 3%.

Shares of ServiceNow have fallen nearly 30% year to date on fears that artificial intelligence could destroy the company's business model. Over the same period, the iShares Expanded Tech-Software Sector exchange-traded fund IGV has fallen 22%. Many investors have also been displeased with ServiceNow's aggressive acquisition strategy after the company announced a $7.75 billion deal to acquire cybersecurity firm Armis late last year.

See more: Why ServiceNow's stock just sank to its worst day in 11 months

On the company's fourth-quarter earnings call in January, ServiceNow's organic-growth guidance fell short of expectations, further contributing to fears of a growth slowdown. The company also announced a $5 billion share-repurchase program, including a $2 billion accelerated share repurchase.

"Management is clearly sending a signal to the market that it believes the company's shares are undervalued and have been unfairly hit in the broader software selloff," William Blair analyst Arjun Bhatia wrote in a Tuesday note. ServiceNow has picked up significant AI momentum, growing its AI annual contract value to $600 million from $250 million in the last year, according to a disclosure from the latest earnings call.

However, "the software market is trading like a monolith and investors are largely not differentiating risk profiles, competitive positioning and fundamentals of specific companies," Bhatia noted.

Read: Software stocks have been crushed. Here's how to play the sector as the dust settles.

McDermott isn't the only tech insider buying the recent software dip. Hubert Joly, a director at S&P Global $(SPGI)$ and the former CEO of Best Buy $(BBY)$, announced a $1 million purchase of S&P Global shares on Feb. 11.

Meanwhile, earlier this month, Shopify (SHOP) announced a share-buyback program of up to $2 billion - the largest in the company's history.

Shares of Shopify and S&P Global are down 29% and 20% year to date, respectively.

More: Shopify's stock dives as earnings miss overshadows AI opportunity

-Christine Ji

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February 17, 2026 12:08 ET (17:08 GMT)

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