ServiceNow (NOW) is making one of the biggest cybersecurity bets. The software company has announced a $7.75 billion all-cash acquisition of Armis, an IoT and operational technology (OT) security startup. The deal is expected to close in the second half of 2026. Following the news, NOW stock fell about 2.5% on Tuesday, reflecting investors’ concerns about the size of the deal.
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Armis is a key player in exposure management, protecting everything from IT systems to medical devices, industrial equipment, and critical infrastructure. The company has recently surpassed $300 million in annual recurring revenue, reflecting more than 50% year-over-year growth.
The move reflects a major expansion of ServiceNow’s security ambitions as the company positions itself as an “AI control tower” for enterprises, capable of managing workflows, risk, and cybersecurity across all connected devices.
ServiceNow to Deepen Cybersecurity Strategy with Armis
ServiceNow says the deal will create a unified, end-to-end security exposure and operations stack, combining real-time asset discovery, threat intelligence, and automated remediation workflows, a natural extension of its platform strategy.
By integrating Armis’ device intelligence with ServiceNow’s workflow automation, the company aims to triple its market opportunity in security and risk solutions.
The deal also follows a string of cybersecurity-focused acquisitions by ServiceNow in 2025, including identity‑security startup Veza and AI agent platform Moveworks.
What Are Analysts Saying?
Wells Fargo analyst Michael Turrin said the acquisition fits well with ServiceNow’s core platform and extends its long-running pattern of opportunistic tuck-in M&A. However, he also noted that the company’s increased reliance on inorganic growth comes at a time when its software growth is expected to slow to below 20% next year.
Turrin reiterated a Buy rating on ServiceNow stock with a $255 price target, signaling confidence in the long-term value of the deal.
Similarly, William Blair’s Arjun Bhatia keeps a Buy rating on ServiceNow, saying the Armis deal expands the platform by adding unified visibility across IT and IoT/OT assets. He believes this strengthens ServiceNow’s position in sectors like healthcare and manufacturing.
While the deal size may raise some concerns, he views Armis as a high-quality addition that enhances the company’s long-term value.
Is NOW Stock a Buy or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on NOW stock based on 27 Buys, two Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Further, the average ServiceNow price target of $228.86 per share implies 11.24% upside potential.
