1. ServiceNow Inc. (NYSE:NOW)
TTM Net Income: $1.14 Billion
5-Year Net Income CAGR: 233.07%
Number of Hedge Fund Holders: 97
ServiceNow Inc. (NYSE:NOW) is an American software company that specializes in cloud-based solutions for managing digital workflows across various industries. The company provides a comprehensive platform that utilizes artificial intelligence and machine learning to automate and optimize business processes. Its offerings are designed to help organizations improve efficiency, maximize business outcomes, enhance customer experiences, and drive digital transformation.
Through strategic collaborations and continued investment in innovation, the company has become one of the biggest players in the enterprise software market. In 2020, ServiceNow Inc. (NYSE:NOW) introduced an industry solutions strategy that focuses on creating tailored workflows for specific sectors, such as banking and telecommunications. By partnering with major firms like Deloitte and Accenture, the company is working to address unique challenges across various industries, enhancing its value proposition and expanding its market reach.
The company is actively expanding its global presence and enhancing its offerings. ServiceNow Inc. (NYSE:NOW) has announced plans to launch a UAE Cloud, hosted on Microsoft Azure, with a targeted delivery date in the first half of 2025. This new cloud service aims to support both public and private sector organizations in the UAE, providing them with advanced tools for business transformation. Additionally, ServiceNow has made a strategic investment in inMorphis, a leading ServiceNow partner, to strengthen its presence in India and the ASEAN region.
ServiceNow Inc. (NYSE:NOW) recently reported strong financial performance for Q2 2024, exceeding its guidance across all topline growth and profitability metrics. Subscription revenues reached $2.54 billion, marking a 23% increase compared to the previous year. Total revenues also grew by 22% year-over-year to $2.62 billion. As of Q2 2024, the company’s current remaining performance obligations stood at $8.78 billion, reflecting a 22% increase, while total remaining performance obligations surged to $18.6 billion, up 31% from last year. Additionally, ServiceNow recorded 88 transactions over $1 million in new annual contract value (ACV), which is a 26% rise year-over-year.
These results highlight the company’s robust growth and strong demand for its services, demonstrating its effectiveness in capturing market opportunities. The significant increase in remaining performance obligations indicates a healthy pipeline for future revenue generation.
Over the past 5 years, ServiceNow Inc. (NYSE:NOW) has recorded a compound annual growth rate of 27.02% for its top line and an astonishing 233.07% for its bottom line.
According to Insider Monkey’s Q2 database of over 900 hedge funds, 97 hedge funds held stakes in ServiceNow Inc. (NYSE:NOW). As of June 30, Fisher Asset Management holds 1.6 million shares of the company, valued at $1.26 billion, making it NOW’s most prominent shareholder.
Overall, NOW ranks first among the 8 most profitable large-cap stocks to invest in. While we acknowledge the potential of ServiceNow Inc. (NYSE:NOW), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NOW but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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