Jim Cramer on ServiceNow: “It Still Has a High Price-to-Earnings Multiple”

Company Overview - ServiceNow, Inc. (NYSE:NOW) provides a cloud platform that supports digital workflows through AI, automation, low-code tools, analytics, and a set of IT, security, customer-service, and employee-experience products [2] Financial Performance - In the third quarter of 2025, ServiceNow reported strong quarterly results with year-over-year growth in current Remaining Performance Obligations (cRPO) exceeding consensus expectations at +21.5% compared to +19.4% [2] - Subscription revenue also surpassed consensus estimates, driven by net new Annual Contract Value (ACV) outperformance and better-than-expected on-premise sales [2] Market Position and Competitive Advantage - ServiceNow is viewed as a dominant workflow platform that can integrate with all systems of record within a company, providing workflow engines to facilitate operations across multiple systems [2] - The company has added six new government logos during the quarter, indicating its strong position in the U.S. Federal government sector despite investor concerns [2] Product Development and AI Integration - New products are showing strength, particularly AI-embedded SKUs, with the company closing 21 deals involving 5 or more Now Assist products, including a significant $20 million deal during the quarter [2] - ServiceNow is positioned to serve as a central platform for deploying and managing AI agents across enterprises [2] Investor Sentiment - Despite the strong performance metrics, shares of ServiceNow moved lower, reflecting investor concerns and market dynamics [2] - The TCW Concentrated Large Cap Growth Fund remains bullish on ServiceNow shares, although it acknowledges that certain AI stocks may offer greater upside potential with less downside risk [2]