ServiceNow's (NOW) fundamentals are solid ahead of its Q2 earnings on July 23, Oppenheimer said in a note Wednesday.

"Results should support durable growth for ServiceNow and its perception as a generative AI winner, which underpins multiples," the report said. Oppenheimer kept its outperform rating.

Still, Oppenheimer said it expects Q2 current remaining performance obligations, or CRPO, to have a "lower magnitude" beat due to a lackluster outlook for its Federal business in 2025, macro uncertainties, as well as tougher comparisons.

The report also said the firm is entering H2 with "good spending tailwinds and prioritization with AI and back-office software, and seems likely to show a slight beat-and-raise" in its Q2 print.

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