6. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holdings in Q4 2025: 118
Enterprise workflow management software provider ServiceNow, Inc. (NYSE:NOW)’s shares are down by 50.9% over the past year and by 32% year-to-date. Bank of America discussed the firm on May 19th as it reinstated coverage and set a $130 share price target and a Buy rating. The bank saw ServiceNow, Inc. (NYSE:NOW) as a beneficiary of the AI rollout due to its integration into the enterprise workflow ecosystem. While the shares are down year-to-date, they are up by 14.5% since May 13th. Cramer briefly commented on the move in ServiceNow, Inc. (NYSE:NOW)’s shares:
“I was doing some work on Adobe, losing the schools. You know schools are really important, because you have to take a course on Adobe to be able to use Adobe. That stock’s been going up, I think that that’s had its move. ServiceNow had its move.
“Do I like that Micron is running ahead of time? No. But ServiceNow’s had a good run.”
TCW Concentrated Large Cap Growth Fund discussed ServiceNow, Inc. (NYSE:NOW) in its Q1 2026 investor letter:
“Our weakest relative performance during the quarter came from the information technology and healthcare sectors. Shares of ServiceNow, Inc. (NYSE:NOW; 2.60%**) moved lower despite reporting solid quarterly results in late January. Operating margin (33.5%) and EPS (+30% YoY) topped consensus estimates, and cRPO (current Remaining Performance Obligations) grew 20.5% (vs. guidance of +18%). Management’s sequential forward guidance for cRPO was only in-line with consensus estimates, however, and provided ammunition for bears to posit NOW’s three recent acquisitions (Armis, Moveworks and Veza) were a signal that organic growth may be slowing. While we believe the organic growth outlook remains healthy and that all three acquisitions are good strategic fits that help expand NOW’s TAM (Total Addressable Market) and differentiation, the rise of agentic AI led to an abrupt market sell off in many SaaS (Software-as-a-Service) stocks, including NOW. The market’s current view is that well-funded AI labs such as Anthropic and OpenAI will allow enterprises to bypass specialized software, thus reducing the need for NOW’s offerings. Though we recognize the industry is shifting away from seat-based to consumption-oriented pricing structures, we believe the complexity and switching costs for an enterprise migration is misunderstood by the market. Our view remains that NOW is strongly positioned to capitalize on AI monetization given its role as the system of engagement across enterprise workflows. While still somewhat early, NOW’s monetization of AI offerings is impressive (closed 12 Now Assist deals over $1 million in ACV during the quarter, Agent Assist consumption grew 55x since the launch in May 2025, and $600 million ACV for Now Assist). We remain constructive on shares.”
While we acknowledge the potential of SBUX to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than SBUX and that has 100x upside potential, check out our report about the cheapest AI stock.
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