ServiceNow sinks even as Baird defends after strong Q2, guidance
JHVEPhoto
ServiceNow (NYSE:NOW) shares fell nearly 2.7% on Thursday even as the cloud computing company reported strong second-quarter results and guidance, prompting investment firm Baird to defend the stock.
"[Conference call] implies a healthy level of deceleration, though we suspect some level of conservatism is embedded here," analyst Rob Oliver, who has an outperform rating on ServiceNow (NOW), wrote in an investor note.
Oliver added that U.S. Federal spending "remains strong" with the second-quarter the company's best ever and his checks "support this momentum, which can help support a solid Q3."
ServiceNow (NOW) generated an adjusted earnings of $2.37 per share on $2.15B in revenue during the second-quarter, including subscription revenue of $2.075B, up 25% year-over-year.
A consensus of analysts expected the company to earn $2.05 per share on $2.13B in revenue during the period.
Looking to the third-quarter, ServiceNow (NOW) believes subscription revenue will be within a range of $2.19B to $2.2B, above the $2.15B estimate. For the full-year, subscription revenue is likely to fall within a range of $8.58B to $8.6B, above the $8.51B estimate.
Oliver also said that expects to learn more about the company's generative AI initiatives, including the recently announced AI Lighthouse, a partnership with Nvidia (NVDA) and Accenture (ACN), at the company's Vancouver product release in September. 
More on ServiceNow

ServiceNow, Inc. Q2 2023 Earnings Call Transcript
Ensemble Capital - ServiceNow: Creating Amazing Customer Growth Stories
ServiceNow Stock: Still A Strong Buy