ServiceNow stock sinks on Iran war impact

What happened: ServiceNow (NOW) stock plummeted 13% in premarket on Thursday, January 30, following a 14% drop the previous day after reporting first-quarter results. The company's subscription revenue climbed 22% year-over-year to $3.67 billion, but deal delays in the Middle East due to geopolitical tensions added a 75-basis-point revenue headwind. Seven Wall Street firms cut price targets on NOW, with shares closing at $428.88 on January 30.

Market impact: The sell-off in ServiceNow stock fueled a broader sell-off across software stocks, including Salesforce (CRM), Oracle (ORCL), and Adobe (ADBE). The conflict in the Middle East disrupted sales growth for ServiceNow, raising concerns about the impact of geopolitical risks on enterprise software companies. The stock's premium valuation, even after the plunge, may limit further downside.

What to watch next: ServiceNow's second-quarter earnings report on May 29 will provide an update on the Middle East sales situation and overall business performance. Additionally, any developments in the Middle East peace talks could influence the stock's trajectory. Technical levels around $400 and $450 will be crucial for determining the stock's next move.