Should You Hold ServiceNow (NOW)?

RiverPark Advisors, an investment advisory firm and sponsor of the RiverPark family of mutual funds, released its “RiverPark Large Growth Fund” Q3 2025 investor letter. A copy of the letter can be downloaded here. U.S. equity markets recorded strong gains in the third quarter, with the S&P 500 Total Return Index rising 8.12% and the Russell 1000 Growth Index returning 10.51%. The fund also surged in the quarter and returned 4.73%. Market leadership was narrow in the quarter, with a few mega-cap tech and consumer companies thriving on strong AI innovation. Information Technology, Consumer Discretionary, and Communication Services led sector performance, while Energy and Utilities lagged. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, RiverPark Large Growth 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 -11.23%, and its shares lost 18.23% of their value over the last 52 weeks. On November 17, 2025, ServiceNow, Inc. (NYSE:NOW) stock closed at $835.79 per share, with a market capitalization of $173.971 billion.

RiverPark Large Growth Fund stated the following regarding ServiceNow, Inc. (NYSE:NOW) in its third quarter 2025 investor letter:

"ServiceNow, Inc. (NYSE:NOW): ServiceNow shares were weaker in the quarter as investors rotated toward higher beta AI hardware and semiconductor names and out of more “legacy” software names. Results and forward commentary remained solid despite some increased macro uncertainty and cautious enterprise IT spending. Guidance was reaffirmed, but valuation compression led to relative underperformance.

Despite a lack of investor enthusiasm, ServiceNow continues to execute well and remains one of the most mission-critical platforms in enterprise software. With expanding use cases across IT, employee experience, and customer workflows, the company should sustain mid-teens revenue growth and rising free cash flow margins."

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 best fundamentally strong stocks to buy. 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.