Investment advisory firm Ithaka Group released the “Ithaka US Growth Strategy” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. Following two years of gains exceeding 25%, the markets welcomed the new year with considerable volatility and a sharp decline. In the first quarter, Ithaka’s portfolio underperformed the R1000G by 30 basis points, recording -10.3% to -10.0% (gross of fees) amid a negative market environment. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Ithaka US Growth Strategy highlighted stocks such as ServiceNow, Inc. (NYSE:NOW). ServiceNow, Inc. (NYSE:NOW) offers intelligent workflow automation solutions for digital businesses. The one-month return of ServiceNow, Inc. (NYSE:NOW) was 15.51%, and its shares gained 35.20% of their value over the last 52 weeks. On April 28, 2025, ServiceNow, Inc. (NYSE:NOW) stock closed at $937.41 per share with a market capitalization of $194.024 billion.
Ithaka US Growth Strategy stated the following regarding ServiceNow, Inc. (NYSE:NOW) in its Q1 2025 investor letter:
“Founded in 2004, ServiceNow, Inc. (NYSE:NOW) has become the leading provider of cloud-based software solutions that defi ne, structure, manage and automate workflow services for global enterprises. ServiceNow pioneered the use of the cloud to deliver IT service management (“ITSM”) applications. These applications allow users to manage incidents and to plan new IT projects, provision clouds, manage application performance and build applications themselves. The company has since expanded beyond the ITSM market to provide workflow solutions for IT operations management, customer support, human resources, security operations and other enterprise departments where a patchwork of semi-automated processes have been used with varying success in the past. ServiceNow’s stock fell during the quarter, driven by the announcement that its much anticipated AI Agents offering is going to be offered as a consumption-based model, vs the expected seat-based model. This change will make revenue recognition fall further into the future, as clients can take their time adopting (and therefore paying) for the new product.”
A team of software engineers at desks working on code for a cutting-edge cloud computing solution.
ServiceNow, Inc. (NYSE:NOW) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 110 hedge fund portfolios held ServiceNow, Inc. (NYSE:NOW) at the end of the fourth quarter compared to 78 in the third quarter. In the first quarter of 2025, ServiceNow, Inc’s (NYSE:NOW) subscription revenue increased 20% year on year in constant currency to $3.005 billion. While we acknowledge the potential of ServiceNow, Inc. (NYSE:NOW) as an investment, our conviction lies in the belief that 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 NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we covered ServiceNow, Inc. (NYSE:NOW) and shared the list of stocks Jim Cramer recently discussed. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.