15 Best Growth Stocks to Buy for the Next 3 Years

4. ServiceNow Inc. (NYSE:NOW)

3-Year Revenue CAGR: 22.38%

Number of Hedge Fund Holders: 110

ServiceNow Inc. (NYSE:NOW) provides a cloud-based solution for digital workflows. It operates the Now platform, which is an AI platform for digital transformation ML, robotic process automation, process mining, analytics, and low-code/no-code development tools. It serves a diverse clientele, such as the government and the healthcare & life science sector.

In Q1 2025, ServiceNow’s Technology Workflows segment saw 36 deals over $1 million in net new ACV, which included two deals that exceeded $5 million. These solutions were present in more than half of the company’s top 20 deals. ServiceNow is heavily integrating AI into these workflows with products like ITSM Plus and ITOM Plus, which saw sequential net new ACV growth. For instance, ITOM Plus saw a ~70% increase. The company’s AI-powered Now Assist is also being adopted across these areas.

This adoption has resulted in improvements like Orca’s IT support deflection increasing from 18% to 94% and a 1.5-day reduction in average incident resolution time. On April 25, investment bank Canaccord Genuity increased its price target on ServiceNow Inc. (NYSE:NOW) to $1,075 from $900 while keeping a Buy rating after the company reported stronger-than-expected Q1 2025 results.

Lakehouse Global Growth Fund stated the following regarding ServiceNow, Inc. (NYSE:NOW) in its January 2025 investor letter:

“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.”