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10. ServiceNow, Inc. (NYSE:NOW)

Number of Hedge Fund Holders: 110

The host of Mad Money mentioned ServiceNow, Inc. (NYSE:NOW) as one of the enterprise software businesses that are struggling lately. Here’s what he said:

“ServiceNow, that’s down 32% from its peak in January. I cannot remember that kind of decline. […] ServiceNow stood out with 13% of revenue coming from federal government business. […] I’m not sticking my neck out for ServiceNow with its sizable exposure to the federal government.”

Despite short-term headwinds, ServiceNow remains a leader in digital workflow automation, and its ongoing shift into AI-driven IT services could be a long-term catalyst.

Sands Capital Select Growth Fund stated the following regarding ServiceNow, Inc. (NYSE:NOW) in its Q4 2024 investor letter:

“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.”