Long-Term Stock Portfolio: 15 Best Stocks for 15 Years

9) ServiceNow, Inc. (NYSE:NOW)

10-year Revenue Growth: ~32.03%

Number of Hedge Fund Holders: 110

ServiceNow, Inc. (NYSE:NOW) offers software solutions to structure and automate various business processes through a SaaS delivery model. With businesses increasingly looking for AI-powered solutions in a bid to improve efficiency and decision-making, the company’s expanded AI capabilities can fuel significant growth and market share gains. The company’s platform approach and growing AI capabilities can bring opportunities for expansion over and above its traditional IT management stronghold. ServiceNow, Inc. (NYSE:NOW)’s moves into customer service management as well as human resources exhibit its ability to utilise its core technology in adjacent markets.

The company announced that it has signed a definitive agreement to acquire Logik.ai, an industry leader with a modern, AI-powered, and composable Configure, Price, Quote (CPQ) solution. Logik.ai’s capabilities for sales and commerce are expected to expand ServiceNow, Inc. (NYSE:NOW)’s growing CRM footprint as well as empower sales organizations to close deals faster, fuel productivity levels, and witness greater efficiency. Furthermore, the acquisition can drive ServiceNow, Inc. (NYSE:NOW)’s momentum in Sales and Order Management (SOM).

Lakehouse Capital, a Sydney-based investment manager, released its January 2025 investor letter. Here is what the fund said:

“US-based software company ServiceNow, Inc. (NYSE:NOW) delivered another impressive quarterly result. Revenues grew 21% year-on-year in constant currency terms to $2.9 billion and net income grew 30% year-on-year to $384 million. The company’s key performance indicators remained healthy, with their backlog (remaining performance obligations) growing 23% year-on-year to $22.3 billion (i.e. greater than 2x annual revenue) and renewal rates held firm at 98%. As we have noted in the past, the company’s renewal rates are remarkable as not only are they best-in-class, but they are also extremely consistent, typically in the range of 97% to 99%. These industry-leading renewal rates speak to the mission critical nature of the platform and are a key driver of the long-term annuity value in the business. Zooming out, we continue to believe ServiceNow is one the highest quality software businesses globally as the combination of consistent growth at scale, robust free cash flow generation and a large addressable market make it a compelling opportunity.”