Jim Cramer Backs ServiceNow (NOW): "Bill McDermott's a Great Jockey"

We recently published a list of Jim Cramer’s Thoughts on These 13 Stocks. In this article, we are going to take a look at where ServiceNow, Inc. (NYSE:NOW) stands against other stocks that Jim Cramer discussed.

On Thursday’s episode of Mad Money, Jim Cramer voiced his exasperation over the skepticism surrounding AI infrastructure as he stated that it was never backed by solid evidence to begin with. He expressed frustration that so many investors had been misled into believing that the AI infrastructure boom had somehow stalled.

“Earnings season, it’s a pain in the neck. It’s convoluted stuff coming at you from all different directions. Loss of sleep, just a total time suck and I love it. I love it because it clears things up. The false narratives are exposed. You can go back to playing offense, not defense. And few false narratives have gone as far as this story about the end of data center spending.”

READ ALSO: 8 Stocks on Jim Cramer’s Radar Recently and Jim Cramer Listed 20 Best Performing Stocks of the Last 20 Years

According to Cramer, the story took root back on January 27th, “DeepSeek Monday,” when a Chinese company said that they developed a generative AI model requiring significantly fewer computing resources than industry leaders. He added:

“All the previously red-hot AI infrastructure stocks were immediately crushed. You know what? They never really recovered.”

Cramer questioned how the doubt could have been spread so easily. He pointed to the media’s role and wondered whether reporters asked the right questions or enough questions at all. He criticized the consistent spotlight given to bearish voices, many of whom had clear financial motives.  As per Cramer, some of these commentators failed to disclose that they had short positions across the AI sector. He accused them of putting profits ahead of facts as he noted that too much money was at stake for them to let reality interfere with their narrative. He added:

“I know it may be hard to believe that huge companies with tens of billions of dollars to spend actually keep funneling that money to the data center suppliers… but that’s exactly what’s happening, and I think it’s not too late to own a lot of the members of the complex. Even as I expect that if we wait a few days, the bears will be out again… They just can’t stop trying to make money at your expense.”

Our Methodology

For this article, we compiled a list of 13 stocks that were discussed by Jim Cramer during the episodes of Mad Money aired on April 30 and May 1. We listed the stocks in ascending order of their hedge fund sentiment as of the fourth quarter of 2024, which was taken from Insider Monkey’s database of over 1,000 hedge funds.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

ServiceNow, Inc. (NYSE:NOW)

Number of Hedge Fund Holders: 110

ServiceNow, Inc. (NYSE:NOW) was mentioned during the episode, and here’s what Mad Money’s host had to say:

“I would say ServiceNow works. I think Bill McDermott, you know, Bill McDermott’s like one of these great jockeys that I’m talking about. He has turned that company around. He has done great things there, and he is the leader in AI. I think McDermott, I think ServiceNow. Folks, sometimes you have to keep the faith in leaders of great companies.”

ServiceNow (NYSE:NOW) offers digital tools that help companies automate tasks. The company’s products are designed to improve how organizations manage their daily operations. Ithaka Group stated the following regarding the company in its Q1 2025 investor letter:

“Founded in 2004, ServiceNow, Inc. (NYSE:NOW) has become the leading provider of cloud-based software solutions that defi ne, structure, manage and automate workflow services for global enterprises. ServiceNow pioneered the use of the cloud to deliver IT service management (“ITSM”) applications. These applications allow users to manage incidents and to plan new IT projects, provision clouds, manage application performance and build applications themselves. The company has since expanded beyond the ITSM market to provide workflow solutions for IT operations management, customer support, human resources, security operations and other enterprise departments where a patchwork of semi-automated processes have been used with varying success in the past. ServiceNow’s stock fell during the quarter, driven by the announcement that its much anticipated AI Agents offering is going to be offered as a consumption-based model, vs the expected seat-based model. This change will make revenue recognition fall further into the future, as clients can take their time adopting (and therefore paying) for the new product.”

Overall, NOW ranks 2nd on our list of stocks that Jim Cramer discussed. While we acknowledge the potential of 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 time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than NOW but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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