25. ServiceNow (NOW)
Number of Hedge Funds: 118 (2025Q4)
Number of Hedge Funds: 104 (2025Q3)
As of early March 2026, the situation for ServiceNow (NOW) presents a fascinating “tug-of-war” between fundamental performance and stock price action. While the shares have struggled significantly over the last year, elite investors and company insiders are signaling two very different stories.
1. The “Mistake” Perspective: Why the Stock is Down
- Severe Underperformance: ServiceNow shares have plummeted 43% over the past year and are down 27% year-to-date.
- Valuation Compression: Despite being a leader in enterprise workflow, the stock has been hit by the broader cooling of SaaS (Software as a Service) multiples, even as the company continues to hit its operational targets.
2. The Bull Case: Why Elite Managers Are Staying
Despite the stock’s slide, high-profile analysts and investors believe the sell-off has created a massive opportunity:
- Jim Cramer’s Defense: Just this week (February 28, 2026), Jim Cramer reiterated that ServiceNow is a “great company” and argued that CEO Bill McDermott is “doing everything he can” to navigate the current environment.
- The AI Pillar: ServiceNow is being re-rated as a core AI play. Analysts believe its platform is uniquely positioned to become the “orchestration layer” for generative AI in the enterprise, which hedge funds typically view as a long-term winning bet regardless of short-term price volatility.
3. Insider Trading: A Flurry of Activity
The most telling data comes from the “Insider Roster.” In late February 2026, there was a massive wave of activity from nearly every top executive at ServiceNow.
Recent Insider Transactions (February 2026):
- Bill McDermott (Chairman & CEO): Active as of February 20, 2026.
- Gina Mastantuono (CFO): Active as of February 20, 2026.
- Amit Zavery (President, CPO & COO): Active as of February 20, 2026.
- Paul Fipps (President, Global Customer Ops): Active as of February 25, 2026.
- P. Jacqueline Canney (Chief People & AI Enablement Officer): Active as of February 20, 2026.
Analysis of Insider Behavior: The fact that the CEO, CFO, COO, and the new Chief AI Enablement Officer are all transacting at the same time suggests a coordinated vesting and tax-planning event following the company’s fiscal year-end. While these are often sales to cover taxes, the sheer volume of “Skin in the Game” held by this leadership team—particularly the appointment of an AI Enablement Officer—shows that the company is structurally pivoting toward the next tech cycle.
Summary Verdict
Hedge funds haven’t “soured” on ServiceNow as much as they are waiting for the market to stop punishing SaaS stocks. With the shares down 43%, the “smart money” is focused on the AI integration and the McDermott leadership as the primary reasons to stay. The heavy executive activity in late February indicates a team that is highly incentivized and fully aligned with the 2026 “Agentic AI” roadmap.
