We recently published a list of 12 Best Enterprise Software Stocks to Buy Now. In this article, we are going to take a look at where ServiceNow, Inc. (NYSE:NOW) stands against other best enterprise software stocks to buy now.
In 2024, the global enterprise market size was estimated at $263.79 billion, according to Grand View Research. It’s expected to now grow at a CAGR of 12.1% from 2025 to 2030, due to the increasing demand for automated and integrated solutions. Enterprise software becomes more desirable as organizations seek reduced reliance on HR to eliminate manual errors and automate routine tasks. Therefore, ERP (enterprise resource planning), CRM (customer relationship management), and data analytics software are becoming increasingly popular.
Enterprise software is actively transforming with the integration of AI technologies, which changes how it’s designed, deployed, and utilized. According to Endava, GenAI is driving this transformation by incorporating creative and analytical capabilities into enterprise applications. This enables software to undergo intelligent tasks like generating reports, creating personalized training materials, and writing codes. AI not only automates manual jobs but also allows hyper-personalization of customer-facing enterprise software. This allows platforms like CRM and e-commerce to deliver targeted content and recommendations, which leads to higher customer satisfaction and improved sales. This is fueled by adaptive AI-enhanced enterprise software that learns from vast datasets to provide real-time and individualized interactions.
AI-driven automation is also becoming more popular in core business processes. ERP and workflow management systems are automating complex tasks and reducing manual intervention to improve overall efficiency. Enterprises are streamlining operations and making data-driven solutions through the integration of now-standard features like process mining, intelligent document processing, and predictive analytics. Agentic AI is further pushing enterprise software towards greater autonomy. These are AI systems that act like human agents and autonomously perceive, reason, and analyze data to achieve certain goals. As enterprise software continues to integrate advanced AI capabilities in its regular applications, the technology becomes more proactive and intelligent.
Our Methodology
We sifted through ETFs and financial media reports to compile a list of the top enterprise software stocks. We then selected the 12 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
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 software engineer at work, surrounded by a wall of computer monitors connected to a ‘Data Cloud’ platform.
ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 110
ServiceNow, Inc. (NYSE:NOW) provides cloud-based solutions for digital workflows globally. It operates the Now platform, which is an AI platform for digital transformation ML, robotic process automation, and analytics. It also provides asset management, integrated risk management, IT service management, and Operational Technology management. It offers HR, legal, and workplace service delivery products.
The company’s Now Platform is actively integrating AI which drives its adoption. The company is also seeing higher adoption of its AI-powered Pro Plus offerings. In Q4 2024, ServiceNow, Inc.’s (NYSE:NOW) AI-related deals were up 150% sequentially. The company focuses on high-value clients and closed 170 deals in Q4 that exceeded $1 million in net new ACV. 19 of these deals were over $5 million and 3 were over $20 million. 2 additional customers also crossed $100 million in total ACV.
The company is developing AI agents to automate complex enterprise processes. These agents both deliver efficiency and drive customer value. For instance, one multinational customer observed a 45% reduction in live chat after it implemented ServiceNow, Inc.’s (NYSE:NOW) Now Assist. On January 30, Baird analyst Rob Oliver reaffirmed a Buy rating on the company with a $1200 price target due to its focus on integrating GenAI products. The company prioritizes adoption over immediate revenue generation.
Sands Capital Select Growth Fund stated the following regarding ServiceNow, Inc. (NYSE:NOW) in its Q4 2024 investor letter, following its strong growth and financials:
“ServiceNow, Inc. (NYSE:NOW) shares advanced following its third-quarter business results, which revealed impressive execution at scale across the company’s product suite.
The business exceeded both top- and bottom-line expectations, with subscription revenue growing 22 percent in constant currency and adjusted operating margins expanding to 31 percent. Momentum continues in its Pro+ generative artificial intelligence (AI) product, which we estimate is generating nearly $100 million—a roughly 200 percent increase relative to the prior quarter. Outside of AI, momentum was broad across products and customer segments.
Over our five-year horizon, we expect ServiceNow to sustain over 20 percent top-line growth with incremental upside from continued progress in its AI-enabled products. We view its durable growth fueled by a broad product suite, paired with AI-related upside, as favorable relative to peers that trade at comparable valuations with weaker platform opportunities.”
Overall, NOW ranks 2nd on our list of best enterprise software stocks to buy now. While we acknowledge the growth potential of NOW, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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 this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.