These companies have become cheaper on a per-share basis in the last few years, but that's not why investors should take a second look.A stock split is a corporate action where a company divides its existing shares into multiple new shares, which increases the total share count while proportionally decreasing the price per share. This can make the stock more affordable and liquid for investors without changing the total market value of the company or an investor's stake.Plenty of stocks have initiated split ...

Core Insights - The article highlights the strong demand for AI services, particularly from ServiceNow, which has integrated generative AI into its software suite, driving significant stock performance and investor interest [1][4][12] Company Performance - ServiceNow announced a 5-for-1 stock split following a 1,000% increase in share price over the last decade, marking its first split since the IPO in 2012 [3][10] - The company aims to exceed its initial goal of $500 million in net new annual contract value (ACV) for its Now Assist suite, with expectations to reach $1 billion in ACV by 2026 [5] - The AI Control Tower's deal volume quadrupled year over year in Q3, indicating strong growth potential for the platform [6] Financial Metrics - ServiceNow's market capitalization stands at $179 billion, with a current share price of $861.87 and a gross margin of 78.05% [9] - Revenue grew by 20.5% year over year in Q3, with a projected growth of 19.5% for Q4, alongside an expected operating margin expansion of 150 basis points for the full year [13][15] Customer Engagement - The company has successfully implemented a land-and-expand strategy, leading to high customer retention rates of around 98% and significant increases in customer spending over time [8][9] - Customers who joined in 2016 or earlier have doubled their spending, while the 2025 cohort has increased their initial ACV by 45%, reflecting the strength of ServiceNow's AI services [9] Market Outlook - Despite a high forward PE ratio of 51 and a price-to-sales ratio of 14, ServiceNow is positioned for continued revenue and earnings growth in the 20% range, justifying its high valuation [15]

Core Viewpoint - The current market volatility presents an opportunity for investors to initiate positions in high-quality stocks that have been undervalued due to recent market conditions [1][2]. Group 1: ServiceNow - ServiceNow's shares have decreased by nearly 9.6% in 2025, creating a potential entry point for investors as the company is well-positioned to benefit from the AI transformation in enterprise software [4][5]. - The company reported a 20% year-over-year increase in subscription revenue and a 22% rise in current remaining performance obligations (cRPO), indicating strong demand for its solutions [5]. - ServiceNow's AI offerings have seen significant traction, with Pro Plus deals quadrupling year over year, and the average annual contract value increasing by one-third quarter over quarter [6]. - The stock is trading at a forward P/E of 57.8, but its resilient business model and strong cash position of $10.9 billion make it an attractive buy [7]. Group 2: PayPal - PayPal's stock has fallen nearly 30% from its December 2024 high, presenting a favorable entry point as the company transitions from a payments platform to a comprehensive commerce platform [8]. - The company's revenue grew by 1% year over year to $7.8 billion, while operating income surged by 31% to $1.5 billion, and GAAP EPS increased by 56% to $1.29 [9]. - PayPal is experiencing strong momentum in various business areas, including branded checkouts and its Venmo service, and is actively entering the AI-powered commerce space [10]. - With a solid balance sheet showing $15.8 billion in cash and a low forward P/E of 13.1 compared to its five-year average of 30.6, the stock appears to be a compelling investment [11]. Group 3: Arista Networks - Arista Networks' stock has declined over 31% since January 2025, yet the company remains attractive due to the rising demand for high-performance networking solutions for cloud and AI applications [12]. - The company holds a 45% market share in high-speed Ethernet switch solutions for data centers and offers AI-powered networking capabilities [13]. - Major clients include Microsoft, Meta Platforms, Apple, and Oracle, which collectively account for 48% of Arista's revenue, providing a strong foundation despite economic uncertainties [14]. - The stock is trading at a forward earnings ratio of 30.9, lower than its five-year average of 39.1, suggesting it is a good investment opportunity [15].