Investment management company Vulcan Value Partners recently released its second-quarter 2026 investor letter. A copy of the letter can be downloaded here. Vulcan Value Partners prioritizes long-term returns and lower risk over short-term performance. In the quarter, the Large Cap Composite (Net) returned 9.5%, the Small Cap Composite (Net) returned 13.3%, the Focus Composite (Net) returned 10.4%, the Focus Plus Composite (Net) returned 10.5%, and the All-Cap Composite (Net) returned 9.0%. The firm reported strong compounding across its strategies in Q2 2026. Management highlighted that their exceptional holdings remain deeply undervalued relative to “what is working” in the market, viewing this as an excellent opportunity for patient investors. In addition, please check the Firm’s top five holdings to know its best picks in 2026.
Vulcan Value Partners’ Q2 2026 investor letter highlighted ServiceNow, Inc. (NYSE:NOW), noting its inclusion in the firm’s All-Cap strategy this quarter. ServiceNow, Inc. (NYSE:NOW) is a cloud-based software company that provides a platform for automating and managing digital workflows. On July 29, 2026, ServiceNow, Inc. (NYSE:NOW) closed at $115.76 per share, reflecting a market capitalization of $119.7 billion. ServiceNow, Inc. (NYSE:NOW) posted a one-month return of 4.56%, while its shares lost 44.33% over the past 52 weeks.
Vulcan Value Partners stated the following regarding ServiceNow, Inc. (NYSE:NOW) in its Q2 2026 investor update:
“We purchased three new positions during the quarter: Veeva Systems Inc., Equifax Inc., and ServiceNow, Inc. (NYSE:NOW). We believe that ServiceNow is also one of the best businesses in the world. ServiceNow automates workflows in large and complex enterprises. Their platform sits on top of all of an enterprise’s data and systems of record. This very unique and enviable position allows ServiceNow to orchestrate and automate work across departments, enterprise wide. To use an analogy, if a large enterprise is an airport, and its multiple software applications are planes, ServiceNow is the control tower coordinating all of these planes/applications.
The company has grown from its roots in IT and now has very large businesses in sales and service, HR, finance, supply chain, operations, and security, as well as in industry specific verticals like Financial Services, Healthcare, and Government. ServiceNow grew revenue 21%, adjusted EBIT 28%, and free cash flow per share 33% in 2025. This growth at scale puts ServiceNow in elite company. Despite the strong performance, the stock is down approximately 40% year to date and 60% since the beginning of 2025. The company has been on our MVP list for over 5 years and has compounded its value at an incredible rate over that period. It has never been materially discounted until recently….” (Click here to read the full text)
ServiceNow, Inc. (NYSE:NOW) ranks 25 on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 108 hedge fund portfolios held ServiceNow, Inc. (NYSE:NOW) at the end of the first quarter, compared to 118 in the previous quarter. In the first quarter of 2026, ServiceNow, Inc.’s (NYSE:NOW) subscription revenues increased 19% year-over-year (in constant currency) to $3.67 billion. While we acknowledge the risk and potential of ServiceNow, Inc. (NYSE: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 time frame. If you are looking for an AI stock that is more promising than ServiceNow, Inc. (NYSE:NOW) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered ServiceNow, Inc. (NYSE:NOW) and shared Night View Capita’s views on the company. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.
READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years.
Disclosure: None. This article is originally published at Insider Monkey.
