Sands Capital, an investment management company, released its “Sands Capital Select Growth Strategy” Q3 2025 investor letter. A copy of the letter can be downloaded here. U.S. large-cap growth equities continued to recover from a sharp sell-off in early April. Strong corporate earnings, investor enthusiasm around artificial intelligence (AI), and growing expectations for Federal Reserve policy easing drove the robust gains. The portfolio returned 6.3% (net) in the quarter, compared to the benchmark’s 10.5% gain. You can check the fund’s top 5 holdings to know more about its best picks for 2025.
In its third-quarter 2025 investor letter, Sands Capital Select Growth Strategy 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 -11.95%, and its shares lost 22.92% of their value over the last 52 weeks. On November 26, 2025, ServiceNow, Inc. (NYSE:NOW) stock closed at $802.72 per share, with a market capitalization of $167.087 billion.
Sands Capital Select Growth Strategy stated the following regarding ServiceNow, Inc. (NYSE:NOW) in its third quarter 2025 investor letter:
“ServiceNow, Inc. (NYSE:NOW) is the leading provider of enterprise workflow automation software, based on market share. Shares continue to face concerns about potential government spending cuts and the risk that AI could disrupt application software providers. We see no evidence of weakening fundamentals and believe AI is enhancing, rather than pressuring, the business. Second-quarter results were strong, with subscription revenue up 22.5 percent year over year and operating margins expanding 230 basis points. Both measures exceeded consensus by one of the widest margins in recent years. ServiceNow also reported 50 percent year-over-year growth in its AI-enabled Pro Plus product, alongside rising adoption of other AI offerings, including NOW Assist, AI Control Tower, and Workflow Data Fabric.
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ServiceNow, Inc. (NYSE:NOW) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 106 hedge fund portfolios held ServiceNow, Inc. (NYSE:NOW) at the end of the second quarter, the same as in the previous quarter. Third quarter subscription revenues of ServiceNow, Inc. (NYSE:NOW) were $3.299 billion, marking a 20.5% year-over-year growth in constant currency. While we acknowledge the potential of ServiceNow, Inc. (NYSE:NOW) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.