Why ServiceNow CEO Bill McDermott Calls the 39% Stock Drop ‘Saaspocalypse Nonsense’ and Believes AI Will Drive the Company to a Trillion-Dollar Valuation

(SeaPRwire) –   Bill McDermott’s tenure as CEO of ServiceNow has been marked by significant upheaval. Shortly after taking the helm at the end of 2019, the global economy ground to a halt due to the COVID-19 pandemic; then, in late 2022, the launch of ChatGPT ignited an AI revolution that continues to reshape the corporate landscape.

Amid these challenges, McDermott has consistently expanded ServiceNow’s operations, which delivers cloud-based software enabling businesses to streamline HR, IT, and other internal processes. Annual revenue rose from $3.46 billion in 2019—the year he joined—to $13.3 billion in 2025, with projections indicating it will exceed $15 billion this year.

Yet Wall Street remains unimpressed, driving the company’s stock down 39% year-to-date and more than 55% below its 52-week peak. On Monday, ServiceNow released a new financial outlook targeting at least $30 billion in annual revenue by 2030—a goal that failed to spark a meaningful rally, with shares gaining less than one percent.

This downturn is often attributed to the so-called Saaspocalypse—the notion that AI will render software-as-a-service platforms like ServiceNow obsolete in the eyes of enterprise buyers.

McDermott dismisses this idea as fundamentally flawed, arguing it misreads the enterprise software ecosystem and overlooks how AI actually accelerates, rather than hinders, ServiceNow’s growth. “It’s nonsense,” he said of the Saaspocalypse narrative.

In a Wednesday interview conducted from Las Vegas during the company’s annual Knowledge conference—where ServiceNow unveiled a suite of new offerings—McDermott, 64, detailed his perspective. The Long Island, New York native acknowledged frustration over the gap between Wall Street sentiment and the enthusiasm of “Main Street customers,” but insisted the stock’s decline wouldn’t deter him. “I’ve faced tougher obstacles on my way to a fight. That’s been my story,” he said. “I’m not going anywhere. I can absorb anyone’s punches and still come out ahead.”

To underscore his confidence, he cited his personal $3 million investment in ServiceNow shares earlier this year, noting that over 90% of employees are also purchasing company stock.

“I told our team clearly: when this takes off, it will take off—and we’ll become a trillion-dollar company,” he said. “The only question is when, not if.”

‘The mystery will be over’

At this week’s Las Vegas event, ServiceNow introduced multiple AI-driven initiatives, products, and partnerships. Among them is Action Fabric, a new service that enables customers to integrate AI agents with their ServiceNow applications—while also establishing a usage-based revenue model as the company moves beyond traditional per-seat licensing.

Recent acquisitions have further strengthened ServiceNow’s position in large markets such as cybersecurity. The $7.75 billion purchase of Armis, finalized in April, bolsters its AI-powered monitoring and security capabilities. Additionally, after nine months of regulatory scrutiny, ServiceNow completed its $2.85 billion acquisition of agentic AI firm Moveworks in December. “We’re exactly where we need to be. We have everything required,” McDermott said when asked about future M&A activity.

Regarding the Saaspocalypse, McDermott noted that while ServiceNow has maintained annual growth above 20% under his leadership, many peers in the SaaS sector had already plateaued before AI gained momentum. “Before AI truly took hold, they were no longer high-growth companies,” said McDermott, who previously served as CEO or co-CEO of SAP, the German enterprise software giant, for nine years prior to joining ServiceNow.

Still, he emphasized that AI poses no existential threat to enterprise software providers. Real value from AI only emerges when the technology can access an organization’s vast internal data—and enterprise software platforms serve as the critical gateway to that data. “These companies are deeply embedded in corporate infrastructure, and they aren’t disappearing,” he said.

Without contextual access to a company’s proprietary data, AI outputs are merely “expensive advice,” McDermott reiterated—a point he has frequently made in recent remarks.

That said, he remains highly optimistic about AI model developers, especially firms like OpenAI, Anthropic, and SpaceXAI, all reportedly preparing for public listings.

“They’ll go public, they’ll perform exceptionally well, and I believe investors will reap strong returns—they have very bright futures ahead,” McDermott said.

Such transparency, he added, will benefit the entire ecosystem. “Once you’re public, everything becomes clear: what you excel at, your revenue forecasts, and crucially, your profitability projections.”

“The mystery will be over,” he said. As investors gain clearer insight into AI companies, they’ll be better equipped to assess the broader market—including firms like ServiceNow. “I believe this will bring clarity and restore rationality to the market,” McDermott concluded.