ServiceNow reported second-quarter revenue of $3.22 billion, a 23% year-on-year increase, and adjusted earnings of $4.09 a share, comfortably ahead of analyst expectations. The workflow software provider lifted its 2025 subscription-revenue forecast to as much as $12.79 billion, citing surging demand for its so-called “agentic AI” tools that automate cross-functional tasks. The upbeat outlook sent the shares up about 4.8% in early New York trading. Chief Executive Officer Bill McDermott said the “AI revolution is in full flight,” arguing that ServiceNow is uniquely positioned to link disparate enterprise systems with artificial-intelligence agents. The company said current remaining performance obligations climbed 25% to $10.92 billion, while large contracts worth more than $20 million in annual value rose 30% from a year earlier. IBM also beat top- and bottom-line estimates for the quarter, posting revenue of $16.98 billion, up 8%, and adjusted earnings of $2.80 a share. Strong sales of new z17 mainframes helped infrastructure revenue jump 14%, and the company’s generative-AI backlog reached $7.5 billion. However, software revenue came in at $7.39 billion, shy of Wall Street forecasts, sparking concerns about the durability of growth in the higher-margin segment. Investors punished the shortfall: IBM’s stock fell as much as 10%, its steepest intraday decline since 2021, even though management reaffirmed a goal of generating more than $13.5 billion in free cash flow this year. Chief Executive Arvind Krishna said some customers are redirecting budgets toward AI infrastructure, a trend that benefited hardware sales but weighed on software momentum. The mixed market reaction underscores how investors are rewarding companies that can translate AI enthusiasm into tangible software revenue while penalizing those that show pockets of weakness. ServiceNow’s stronger outlook contrasts with IBM’s software stumble, highlighting differing investor tolerance for uneven progress as enterprises recalibrate spending around artificial-intelligence priorities.