ServiceNow (NOW) Traded Down Due to Multiple Headwinds

Core Insights - Sands Capital's Q3 2025 investor letter indicates a recovery in U.S. large-cap growth equities driven by strong corporate earnings, AI enthusiasm, and expectations for Federal Reserve policy easing [1] - The portfolio achieved a net return of 6.3% in the quarter, underperforming the benchmark's 10.5% gain [1] Company Analysis: ServiceNow, Inc. (NYSE:NOW) - ServiceNow is recognized as the leading provider of enterprise workflow automation software, holding a significant market share [3] - The stock experienced a one-month return of -11.95% and a 52-week decline of 22.92%, closing at $802.72 with a market capitalization of $167.087 billion on November 26, 2025 [2] - Despite concerns over potential government spending cuts and AI disruption, ServiceNow's fundamentals remain strong, with subscription revenue increasing by 22.5% year-over-year and operating margins expanding by 230 basis points [3] - The company reported a 50% year-over-year growth in its AI-enabled Pro Plus product, alongside increased adoption of other AI offerings [3] - In Q3 2025, ServiceNow's subscription revenues reached $3.299 billion, reflecting a 20.5% year-over-year growth in constant currency [4] - The stock is not among the 30 most popular stocks among hedge funds, with 106 hedge fund portfolios holding it at the end of Q2 2025, unchanged from the previous quarter [4]