Clearbridge Large Cap Growth Strategy Added Servicenow (NOW) to Elevate Select Growth Exposure

ClearBridge Investments, an investment management company, released its “ClearBridge Large Cap Growth Strategy” second quarter 2025 investor letter. A copy of the letter can be downloaded here. In the second quarter, the growth stocks rebounded from tariff uncertainty, with technology and communication services sectors leading in the return to a risk-on environment. The S&P 500 Index returned 10.9% in the quarter, while the technology-heavy NASDAQ Composite soared 17.7%. The benchmark, the Russell 1000 Growth Index, rose 17.8% in the quarter, outperforming the Russell 1000 Value Index. Against this backdrop, the strategy underperformed its benchmark in the second quarter. IT and communication services sectors contributed to the performance while the health care sector detracted. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second quarter 2025 investor letter, ClearBridge Large Cap 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 1.41%, and its shares gained 29.54% of their value over the last 52 weeks. On July 3, 2025, ServiceNow, Inc. (NYSE:NOW) stock closed at $1,044.69 per share, with a market capitalization of $216.41 billion.

ClearBridge Large Cap Growth Strategy stated the following regarding ServiceNow, Inc. (NYSE:NOW) in its second quarter 2025 investor letter:

“The Strategy’s select growth exposure increased during the quarter due to the strong performance of the higher-beta stocks in this growth bucket as well as the purchase of ServiceNow, Inc. (NYSE:NOW). The company provides an end-to-end software-as-a-service (SaaS) platform to help enterprise customers automate and standardize business processes in areas like IT, customer services, sales and data security. ServiceNow also has a monetizable generative AI product being adopted by its customers. We have liked the business for a long time and took advantage of the April selloff to establish a position.”

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ServiceNow, Inc. (NYSE:NOW) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 106 hedge fund portfolios held ServiceNow, Inc. (NYSE:NOW) at the end of the first quarter, which was 110 in the previous quarter. 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 undervalued AI stock set for massive gains.

In another article, we covered ServiceNow, Inc. (NYSE:NOW) and shared the list of best long term growth stocks to invest in. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of NOW as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.