We recently compiled a list of the 20 High Growth Mega Cap Stocks You Can Buy And Hold For Next 5 Years. In this article, we are going to take a look at where ServiceNow, Inc. (NYSE:NOW) stands against the other high growth mega cap stocks.
Exactly 5 years ago, the world struggled to deal with a black swan event: the COVID-19 pandemic. There was so much uncertainty that people didn’t even know if they’d be alive in the next few weeks, let alone figure out where the market was heading. Anyone who invested in the S&P 5 years ago would have gained 83%. If you had bought at the exact bottom, you’d have gained twice that amount.
What the above proves is that the present isn’t necessarily an indicator of what the future holds. All companies that had their workflows disrupted have recovered, some more than others. Some companies have strengthened their supply chains. Others have improved their work-from-home capabilities. Industries like airlines and restaurants have modified their business models to cater to the new dynamics.
These companies have been able to deal with the changing dynamics because of their financial strength and innovation. A company’s past performance and its finances give a good idea of whether it will be able to survive bad times. That’s why when we look at the best mega-cap stocks to hold for the next 5 years, we look at how well they have grown in the last 5 years.
To come up with our list of top 20 mega-cap stocks to hold for the next 5 years, we considered stocks with a market cap of at least $200 billion and a 5-year sales growth rate of at least 10%.
A team of software engineers at desks working on code for a cutting-edge cloud computing solution.
ServiceNow, Inc. (NYSE:NOW)
ServiceNow, Inc. (NYSE:NOW) is a cloud based solutions provider to online workflows. It operates an AI platform for robotic process automation, analytics, digital transformation machine learning, process mining, and low-code development tools. The company has grown its revenue by 26.04% over the last 5 years.
ServiceNow, Inc. (NYSE:NOW) has been a consistent performer for years but it has accelerated its growth by helping businesses organize and automate IT services. Its Now Assist feature, which allows companies to use AI to automate tasks, has grown 150% QoQ! This demand continues to increase and if the management’s word is anything to go by, there is still substantial upside left in the stock:
We are seeing strong demand from customers using AI Agents to assist human agents with complex cases, automate tasks like understanding intricate requests, crafting execution plans, and implementing them within third-party systems.
The firm is seeing the return on its AI capex internally as well. Its AI-supported workflows have improved employee efficiency by 20% across multiple departments with AI Agents helping reduce customer support responses from an average of 4 days to 8 seconds. This type of exponential improvement sets up the company well for future growth as AI Agents start going mainstream.
Overall NOW ranks 4th on our list of the high growth mega cap stocks you can buy and hold for the next 5 years. While we acknowledge the potential of NOW as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as 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 was originally published at Insider Monkey.
