We recently published a list of 10 Best Long Term Tech Stocks to Buy Right Now. In this article, we are going to take a look at where ServiceNow, Inc. (NYSE:NOW) stands against other best long term tech stocks to buy right now.
As per Deloitte, amidst uncertainties and economic turbulence, the broader technology industry can see growth in 2025, courtesy of elevated IT spending, AI investments, and a strong emphasis on innovation. Some analysts expect that global IT spending is expected to grow by 9.3% in 2025, with data center and software segments anticipating to increase at double-digit rates. Notably, worldwide spending on AI is projected to increase at a CAGR of 29% from 2024 to 2028.
Spending To Go Northwards, Says S&P Global
S&P Global sees global IT spending to increase by 9% in 2025, reflecting an improvement from the low 8% area in 2024, with AI spurring massive data center spending and enterprises renewing their investments in traditional hardware. The enterprises have been entering 2025 with a transition to the cloud, and they are slowly accelerating their investments in GenAI projects. The rating agency opines that hardware spending is expected to improve significantly in 2025.
The server shipments are expected to increase ~4% but revenue growth will be significantly higher considering high AI server ASPs. The firm sees network equipment and mobile telecom equipment makers returning to growth while storage sales are expected to grow ~4%. Hyperscale cloud providers are expected to sustain strong revenue growth of over 20%, and the rest of IT services can recover with a growth of ~5% after lackluster performance over the previous 2 years. S&P Global sees this recovery due to the early signs of demand stabilization during Q2 2024 and Q3 2024, with several IT service providers reporting growth in bookings for large transformation projects and improving annual contract values in critical verticals.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
Key Trends for 2025
In 2025, Capgemini expects AI and GenAI to have a significant impact on companies’ priorities and also on several adjacent technology domains, including robotics, supply chains, and tomorrow’s energy mix. Autonomous intelligent systems continue to be more prevalent in performing certain tasks. The next step will be the rise of a ‘super-agent,’ who can orchestrate and optimize several AI systems. In 2025, such advancements are expected to allow new AI ecosystems throughout industries.
The businesses have been navigating complex and unpredictable market conditions. As per Capgemini, technologies such as AI, data, blockchain, IoT, and connectivity with terrestrial-satellite networks can help enhance cost efficiency, resilience, agility, and sustainability of supply chains. Furthermore, additional regulatory and environmental constraints are expected to make this pivot important to ensure competitiveness, agility, and resilience.
Our Methodology
To list the 10 Best Long Term Tech Stocks to Buy Right Now, we used a screener to shortlist the stocks catering to the broader technology sector. Next, we filtered out the ones that have at least 10%-12% revenue growth over the past 10 years and are popular among hedge funds. Finally, the stocks are arranged in ascending order of their hedge fund sentiment, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A team of software engineers at desks working on code for a cutting-edge cloud computing solution.
ServiceNow, Inc. (NYSE:NOW)
10-Year Revenue Growth: ~32%
Number of Hedge Fund Holders: 110
ServiceNow, Inc. (NYSE:NOW) offers cloud-based solutions for digital workflows. BMO Capital analyst Keith Bachman gave a “Buy” rating on the company’s stock, setting a price target of $1,185.00. The analyst believes that the company’s Plus SKUs can fuel potential upside. Moving forward, the Agentic AI integration in Plus SKUs and the potential for higher consumption revenue are expected to act as factors that can result in variability and growth opportunities. Elsewhere, Oppenheimer analyst Brian Schwartz upped ServiceNow, Inc. (NYSE:NOW)’s price target to $1,200 from $1,150, keeping an “Outperform” rating.
As per the analyst, the business has been executing well and possesses healthy momentum with the AI business. As ServiceNow, Inc. (NYSE:NOW) continues to invest and enhance its AI capabilities, which include the development of agentic AI, the company remains well-placed to capitalize on the elevated demand for AI-powered enterprise solutions. With businesses ramping up digital transformation, the demand for workflow automation, AI-driven IT services and cloud-based enterprise solutions are expected to fuel growth for ServiceNow, Inc. (NYSE:NOW).
Investment advisory firm Ithaka Group released the Q4 2024 investor letter. Here is what the firm said:
“Founded in 2004, ServiceNow, Inc. (NYSE:NOW) has become the leading provider of cloud-based software solutions that defi ne, structure, manage and automate workflow services for global enterprises. ServiceNow pioneered the use of the cloud to deliver IT service management (“ITSM”) applications. These applications allow users to manage incidents and to plan new IT projects, provision clouds, manage application performance and build applications themselves. The company has since expanded beyond the ITSM market to provide workflow solutions for IT operations management, customer support, human resources, security operations and other enterprise departments where a patchwork of semi-automated processes have been used with varying success in the past. ServiceNow’s stock rose during the quarter, driven by strong fundamental performance and growing investor recognition of the company’s dominant position in monetizing AI workloads.”
Overall, NOW ranks 9th on our list of best long term tech stocks to buy right now. While we acknowledge the potential of NOW as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued 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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Disclosure: None. This article is originally published at Insider Monkey.