Jim Cramer on Microsoft and Other Stocks

5. ServiceNow, Inc. (NYSE:NOW)

Talking about ServiceNow, Inc. (NYSE:NOW) on Tuesday, Cramer said:

“As is always the case, there are pockets of positivity that seem immune to the tug of the bond market, at least for most of the session. After showing immense love for the semiconductors, disdain for the software companies, for most of the year, the game is reversed. The Adobes and ServiceNows and Microsofts soared today. Doesn’t make a lot of sense and… we’re getting worrisome parabolic moves in many of these stocks.”

ServiceNow (NYSE:NOW) offers a comprehensive platform for digital businesses, providing solutions for workflow automation, AI, machine learning, IT service management, and various other enterprise applications. In the third quarter, it placed significant emphasis on its strategic partnerships, which have played a key role in expanding the company’s AI capabilities. The company deepened its collaboration with Nvidia, aiming to accelerate the adoption of Nvidia’s Agentic AI within enterprise environments.

This partnership, along with others with Siemens and Zoom Video Communications, strengthens its ability to integrate advanced AI solutions into its platform, enhancing its value proposition across various industries.

For the full year 2024, ServiceNow (NYSE:NOW) has projected subscription revenue to reach between $10.655 billion and $10.66 billion, reflecting a year-over-year growth rate of approximately 23%. This is a slight increase from its previous guidance of $10.575 billion to $10.585 billion, which had represented expected growth of around 22%. The company also expects a gross profit margin of 84.5% for its subscription services, with an operating income margin of 29.5% and a free cash flow margin of 31%.