5 Best AI Stocks for 2024

4. ServiceNow Inc (NYSE:NOW)

Number of Hedge Fund Investors: 199

Macquarie Equity recently picked ServiceNow Inc (NYSE:NOW) as one of its top AI picks for a “disruptive 2024.” The firm set an $800 price target on the stock, which shows significant upside potential from the stock’s $699 trading price as of January 9.

As of the end of the third quarter of 2023, 99 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in ServiceNow Inc (NYSE:NOW).

In its October 2023 investor letter, Lakehouse Capital stated the following regarding ServiceNow, Inc. (NYSE:NOW):

“ServiceNow, Inc. (NYSE:NOW) also delivered a strong quarterly result that surprised on the upside. Subscription revenues grew 27% year-on-year to $2.29 billion and non-GAAP operating income grew 41%, both exceeding analyst expectations and the company’s own guidance. Key performance indicators were healthy, with current remaining performance obligations growing 27% year-on-year to $7.4 billion and renewal rates holding firm at 98%. Despite the challenging macro environment for many software companies, ServiceNow’s multi-product platform continues to resonate with large enterprise customers with the number of clients spending over $1 million in annual contract value (ACV) up 17% year-on-year to 1,789, while the cohort spending over $20 million swelled by 58% year-on-year to 49. Helping drive some of that product adoption was their Creator Workflows module, first launched near the start of 2021, which crossed the $1 billion ACV threshold this quarter.

We remain impressed by the execution from management, who continue to expand the company’s total addressable market with new product launches that generate significant return on investment for their customers. Right before the quarter ended, they launched the Vancouver Platform release, which embedded generative AI across all workflows on the Now Platform and managed to close four large deals in a single day. Their generative AI offering drove the highest number of customer requests ever for a prerelease product in the company’s history, providing an attractive pipeline of new deals. Overall, we have high conviction in their growth trajectory and are happy to remain patient shareholders.”