Here’s Why ServiceNow (NOW) Traded Lower in Q1

Impax Asset Management, an investment management company, released its “Impax US Sustainable Economy Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. US large-cap equity fell in the quarter following the uncertainty surrounding US tariffs. In the first quarter of 2025, the fund underperformed the Russell 1000 benchmark. Negative stock selection and lack of energy exposure led to the underperformance of the fund in the quarter. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its first-quarter 2025 investor letter, Impax US Sustainable Economy Fund 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 3.93%, and its shares gained 44.03% of their value over the last 52 weeks. On June 4, 2025, ServiceNow, Inc. (NYSE:NOW) stock closed at $1,012.74 per share, with a market capitalization of $209.791 billion.

Impax US Sustainable Economy Fund stated the following regarding ServiceNow, Inc. (NYSE:NOW) in its Q1 2025 investor letter:

“ServiceNow, Inc. (NYSE:NOW) (Information Technology) which is owned due to its high systematic ESG score, and attractive exposure to enhancing productivity through software and resource efficiency and optimization was down despite solid results. Investor expectations were elevated ahead of earnings and despite top and bottom lines meeting expectations, current remaining performance obligations (cRPOs) coming in a bit weaker than guidance suggested. The firm continues to grow its client base and through its partnership with Microsoft offers a compelling value proposition for businesses looking to drive AI related efficiency gains.”

ServiceNow (NOW) Hits $1.1B in Workflow Revenue, Rides Generative AI Wave

A team of software engineers at desks working on code for a cutting-edge cloud computing solution.

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 Sands Capital Technology Innovators Fund’s views on the company. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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