Soumya Eswaran

Wed, May 28, 2025, 6:27 AM3 min read

Sands Capital, an investment management company, released its “Sands Capital Technology Innovators Fund” Q1 2025 investor letter. A copy of the letter can be downloaded here. Technology Innovators focus on pioneering businesses worldwide that serve as key drivers or beneficiaries of significant long-term changes driven by technology. The fund returned -10.4% (net) in the first quarter compared to a 9.4% return for the benchmark, MSCI ACWI Info Tech and Communication Services Index. The choice of securities in the software sector was the primary factor negatively impacting relative performance. You can check the fund’s top 5 holdings to know more about its best picks for 2025.

In its first-quarter 2025 investor letter, Sands Capital Technology Innovators 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 7.58%, and its shares gained 40.52% of their value over the last 52 weeks. On May 27, 2025, ServiceNow, Inc. (NYSE:NOW) stock closed at $1,027.39 per share, with a market capitalization of $212.65 billion.

Sands Capital Technology Innovators Fund stated the following regarding ServiceNow, Inc. (NYSE:NOW) in its Q1 2025 investor letter:

"ServiceNow, Inc. (NYSE:NOW) is the leading provider of enterprise workflow automation software, based on market share. Shares declined during the quarter amid uncertainty around U.S. federal government spending, which accounts for roughly 10 percent of ServiceNow’s revenue and has been a meaningful growth driver in recent years. These concerns were reflected in the company’s full-year 2025 outlook, which incorporated a stronger U.S. dollar and cautious assumptions for its federal business. Despite this, ServiceNow continues to guide for 100 basis points (1 percent) of operating margin expansion this year. We continue to view the company as one of the best positioned software beneficiaries of AI. A key proof point: Pro Plus, an AI-enhanced upgrade to its Pro tier, grew 150 percent quarter-over-quarter and is now in use by 1,000 customers."

A team of software engineers at desks working on code for a cutting-edge cloud computing solution.

ServiceNow, Inc. (NYSE:NOW) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 106 hedge fund portfolios held ServiceNow, Inc. (NYSE:NOW) at the end of the first quarter, which was 110 in the previous quarter. While we acknowledge the potential of ServiceNow, Inc. (NYSE: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 timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.