Aristotle Atlantic Core Equity Strategy Sold ServiceNow (NOW) to Reduce Software Exposure

Aristotle Atlantic Partners, LLC, an investment advisor, released its “Core Equity Strategy” third-quarter 2025 investor letter. The letter highlighted the market review, quarterly performance, and attribution analysis. A copy of the letter can be downloaded here. In the quarter, the US equity market rallied, with the S&P 500 Index reaching 8.12%. Bonds also finished higher in the period, with the Bloomberg U.S. Aggregate Bond Index increasing 2.03%. The composite has returned 7.22% gross of fees (7.10% net of fees) in the quarter, underperforming the S&P 500 Index’s 8.12% gain. Security selection led to the relative underperformance of the strategy in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Aristotle Atlantic Core Equity 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 -5.97%, and its shares lost 15.99% of their value over the last 52 weeks. On November 13, 2025, ServiceNow, Inc. (NYSE:NOW) stock closed at $849.69 per share, with a market capitalization of $176.295 billion.

Aristotle Atlantic Core Equity Strategy stated the following regarding ServiceNow, Inc. (NYSE:NOW) in its third quarter 2025 investor letter:

"We sold ServiceNow, Inc. (NYSE:NOW) and reduced our subsector overweight to Software, as we continue to see areas of risk from macroeconomic headwinds and seat-based spending pressure due to budgetary shifts within software spend to agentic AI and LLM-leveraged software."

ServiceNow, Inc. (NYSE:NOW) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 106 hedge fund portfolios held ServiceNow, Inc. (NYSE:NOW) at the end of the second quarter, the same as in the previous quarter. Third quarter subscription revenues of ServiceNow, Inc. (NYSE:NOW) were $3.299 billion, marking a 20.5% year-over-year growth in constant currency. While we acknowledge the potential of ServiceNow, Inc. (NYSE: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.

In another article, we covered ServiceNow, Inc. (NYSE:NOW) and shared the list of fantastic stocks every investor should pay attention to. In addition, please check out our hedge fund investor letters Q3 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.