8. ServiceNow Inc. (NYSE:NOW)
Market Capitalization as of September 14: $180.94 billion
Number of Hedge Fund Holders: 97
ServiceNow Inc. (NYSE:NOW) is a cloud-based software company that provides a platform for digital workflows. This platform helps organizations automate and streamline their IT operations, customer service, human resources, and other business processes to improve efficiency, reduce costs, and enhance customer experience.
Its significance as an AI platform for business transformation is rapidly growing, with NowAssist emerging as the fastest-growing product in the company’s history, achieving a quarter-over-quarter doubling of net new annual contract value. In Q2, the company secured 11 deals exceeding $1 million, including two that surpassed $5 million, across various sectors such as banking, healthcare, and technology.
Key clients like Stellantis, American Honda, Merck, and Adobe are using NowAssist to optimize their operations and boost productivity. Its GenAI strategy emphasizes the integration of intelligence into workflows, utilizing domain-specific multimodal language models that are faster, more accurate, and cost-effective. The implementation of NowAssist has resulted in significant time savings, including 45 minutes saved per avoided IT help desk case and a total of 21,000 hours saved through enhanced self-service.
The company impressed the market with strong second-quarter results that highlighted the company’s AI potential. The total revenue generated was up 22.19% year-over-year, recording $2.63 billion. Revenue generated from new Pro Plus edition contracts, which feature GenAI capabilities, doubled from the previous quarter. Subscription revenue increased by 23% year-over-year.
97 hedge funds are long NOW, with the highest stake at $1,263,501,660 by Fisher Asset Management. The company is capitalizing on the rising demand for AI-driven solutions. An instance this quarter, the revenue generated from new Pro Plus edition contracts, which feature GenAI capabilities, doubled from the previous quarter. ServiceNow Inc. (NYSE:NOW) is set to maintain its leadership in the enterprise software market, making it a top Fortune 500 stock.
Lakehouse Global Growth Fund stated the following regarding ServiceNow, Inc. (NYSE:NOW) in its April 2024 investor letter:
“US-based software company, ServiceNow, Inc. (NYSE:NOW), provided another strong result, continuing its long and consistent track record of 20%-plus revenue growth combined with healthy profitability. Subscription revenues grew 25% year-on-year to $2.5 billion and free cash flow grew 47% year-on-year to $1.2 billion. The company’s core operating metrics were also impressive with remaining performance obligations growing 26% year-on-year to $17.7 billion (i.e. roughly 2x 2023 revenue) and renewal rates holding steady at 98%. Performance was evenly spread across segments, products, and geographies, with notable strength in the US federal government. The company now boasts 1,933 customers generating in excess of $1 million in Annual Contract Value (ACV), which is pleasing to see as it implies multiple solutions are involved and that the company’s platform model is increasingly resonating with customers. In our view, ServiceNow is one the highest quality software businesses globally as the combination of consistent growth at scale, robust free cash flow generation and a large addressable market make it a compelling opportunity.”
