ServiceNow (NOW): AI Native SKUs ~20% organic CAGR to FY28

Ahead of ServiceNow's Q3'26 earnings, Bernstein reiterates its view that H2 could act as a catalyst for the stock to re-rate, as the lap of U.S. federal downsizing plus AI-driven demand lift organic constant-currency subscription growth from its Q1 trough toward roughly 20% in Q4, before any contribution from Moveworks and Armis. The note focuses on adoption of the new "AI Native" SKUs: take rates have held near 50% at renewal since launch (including net new customers), contracts with any level of AI reached over 80% in recent weeks, and upgrades from Standard to Foundation and from Pro to Advanced provide much of the upside. The analysts estimate AI Native SKUs accelerate Q4 growth meaningfully, support ~20% YoY growth through FY28 and add roughly 1-2% to FY27-28 revenue, with like-for-like pricing uplift widening the tailwind into Q4 before lapping in FY29;