NOW (ServiceNow, Inc.): Themes, ETFs, and Basket Ideas
NOW is the ticker for ServiceNow, Inc.. This page covers what the company does, where it's heading, its approximate earnings and valuation, key competitors, the themes it belongs to, the ETFs that hold it, and similar stocks worth looking at.
What does ServiceNow, Inc. do?
ServiceNow is one of the largest enterprise software companies in the world, providing a cloud-based platform for digital workflows. The original product (and still the largest revenue contributor) is IT Service Management (ITSM), which helps IT organizations manage incidents, problems, and changes. The platform has expanded into IT Operations Management, HR service delivery, customer service, security operations, and increasingly application development through low-code/no-code tooling.
ServiceNow's platform model means customers buy the underlying Now Platform and then activate different workflows (ITSM, HR, etc.) over time, expanding the relationship. Customer expansion (more workflows, more seats, more usage) drives a high proportion of revenue growth. Founded in 2004 by Fred Luddy, headquartered in Santa Clara, California. Bill McDermott has been CEO since 2019.
Where is ServiceNow, Inc. heading?
1. AI agents and Now Assist.
ServiceNow has been one of the more aggressive enterprise software companies in shipping AI features. Now Assist (generative AI for workflow automation) and Now Agents (AI agents that take actions across workflows) are central to the strategy. The pricing model includes premium SKUs for AI capabilities, providing a meaningful new revenue lever.
2. Platform expansion beyond IT.
Growth has shifted increasingly toward non-IT workflows: HR service delivery, customer service management, security operations, and procurement. Non-IT workflows now contribute a meaningful share of subscription revenue.
3. Public sector strength.
ServiceNow has been particularly successful in US federal government and other public sector accounts. The platform's flexibility and compliance certifications make it well-suited for government workflows.
4. Customer retention as moat.
ServiceNow has historically achieved gross renewal rates above 95% and net retention rates above 120%. Customers expand the platform over multiple years; switching costs grow with each new workflow deployed.
Risks worth tracking: Premium valuation embeds high expectations for continued growth. Macroeconomic pressure can slow enterprise software spending in the near term. Competition from Microsoft (Power Platform, Copilot Studio) and Salesforce in adjacent workflows.
Earnings and valuation (approximate, early 2026)
A simple financial snapshot. These are approximations and refresh quarterly; for current figures see ServiceNow, Inc.'s investor relations page or your broker.
- Revenue (TTM): ~$12 billion
- Operating margin: ~30% (non-GAAP; GAAP is lower due to stock-based compensation)
- Net income (TTM): ~$1.5 billion (GAAP)
- EPS (TTM): ~$7.50 (GAAP)
- P/E (TTM): ~95x (GAAP); ~55x (non-GAAP)
- Price to sales: ~17x
- Dividend yield: None (share buybacks instead)
- Free cash flow: ~$4 billion annually
- Net retention rate: ~120%+
ServiceNow trades at one of the highest valuations in enterprise software, reflecting durable 20%+ revenue growth, high customer retention, expanding platform mix, and the AI revenue tailwind. The premium embeds high expectations; any growth deceleration would compress the multiple.
Themes NOW belongs to
These are the investment theses NOW naturally fits into. Each links to a full theme guide listing every other stock that belongs and the ETFs commonly used as a passive proxy.
NOW's competitors
IT service management
Atlassian Jira Service Management is a major competitor, particularly in midmarket and developer-focused customers. BMC Helix and Ivanti are more traditional ITSM competitors. ServiceNow has been winning enterprise migrations from legacy ITSM platforms over the past decade.
Enterprise workflow platforms
Microsoft (Power Platform, Power Automate, Copilot Studio) is the broadest competitor in enterprise workflow automation. Salesforce competes in customer service workflows and is expanding into other operational areas. Workday competes in HR workflows. Each is a competitor in adjacent spaces; ServiceNow's platform integrates across them.
Security operations (SecOps)
Various SOAR (security orchestration, automation, and response) competitors, plus security-specific platforms like Splunk (now owned by Cisco) and Palo Alto Networks Cortex XSOAR.
Similar stocks
Other names that show up alongside NOW in the same themes. Worth a look if you're thinking about diversification within a single thesis rather than concentration on one ticker.
Also fits Enterprise software. Largest enterprise software franchise: Microsoft 365, Azure, Dynamics, and the Copilot platform.
Also fits Enterprise software. Google Cloud and Workspace are the second-largest enterprise software platform by revenue.
Also fits Enterprise software. Database and ERP franchise plus growing OCI cloud and meaningful AI training workloads.
Also fits Enterprise software. Data and AI platform with commercial revenue growing above 50% on the Artificial Intelligence Platform (AIP).
Using NOW in a Walnut basket
The most useful question to ask about a single stock is rarely “will it go up?”. It's “does this fit a thesis I actually believe in, and how do I size it alongside other stocks that fit the same thesis?” That's what Walnut is built for.
Open the AI assistant on Walnut and describe a thesis (for example: “the AI infrastructure buildout”, “dividend growth large-caps”, “global semiconductors”) where NOW would naturally fit. The AI proposes 5 to 6 constituents with target weights, you review, and you can fund the basket through your broker once you're ready.
Build a basket around NOW with Walnut
Use ServiceNow, Inc. as one constituent in a thematic basket Walnut's AI helps you assemble. Describe a thesis you believe in, the AI proposes the holdings and weights, and you approve before any broker order.
FAQ
What is ServiceNow's ticker symbol?
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NOW, listed on NYSE. Officially ServiceNow, Inc. Founded 2004 by Fred Luddy, headquartered in Santa Clara, California. Trades during US market hours, available at every major US brokerage.
Who are ServiceNow's competitors?
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By segment. IT service management: Atlassian Jira Service Management, BMC Helix, Ivanti. Enterprise workflow platforms broadly: Microsoft Power Platform, Salesforce, Workday. Security operations: various SOAR competitors. Each competitor is strong in a specific niche; ServiceNow competes through platform breadth and integration.
Is ServiceNow an AI stock?
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Yes. ServiceNow has been one of the more aggressive enterprise software companies in shipping AI features through Now Assist and Now Agents. The company has built a meaningful premium-pricing tier specifically for AI capabilities. AI-driven workflow automation is the central product narrative.
What is ServiceNow's P/E ratio?
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Approximately 95x trailing twelve months on GAAP earnings as of early 2026; approximately 55x on non-GAAP earnings (which exclude stock-based compensation). High multiple reflecting durable 20%+ revenue growth, ~120%+ net retention, and the AI revenue tailwind. Premium embeds high expectations.
What does ServiceNow do?
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ServiceNow provides a cloud-based platform for digital workflows. The original and still-largest business is IT Service Management (helping IT organizations manage incidents and changes). The platform has expanded to HR service delivery, customer service, security operations, and application development. Customers typically expand across multiple workflows over time.
Who owns the most ServiceNow stock?
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Major institutional holders include Vanguard (~8%), BlackRock (~7%), and State Street (~4%). Insider ownership is low. ServiceNow is widely held in enterprise-software-focused, large-cap growth, and quality-compounder funds.
Which ETFs have the most ServiceNow exposure?
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VGT (Vanguard Information Technology) holds NOW at meaningful weight (~1.4%). XLK (Technology Select Sector SPDR) holds NOW at similar weight. IGV (iShares Expanded Tech-Software) holds NOW at higher concentration (~7-8%) because of its software focus. QQQ holds NOW at ~1.6%. VOO holds NOW at ~0.7%.
Which thematic baskets typically include ServiceNow?
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One theme on Walnut: Enterprise software (durable 20%+ growth, ~120% net retention, active AI agent product expansion). NOW is also often included in AI infrastructure baskets given the AI feature monetization story. Many Walnut users hold NOW as a core enterprise software anchor alongside MSFT and PLTR.
How much of QQQ is ServiceNow?
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Approximately 1.6% as of early 2026. NOW is typically a top-20 QQQ holding. In VOO, the weight is ~0.7% reflecting broader index weight. In IGV (software-specific ETF), the weight is much higher at ~7-8% reflecting the concentrated software universe.
Is ServiceNow in the S&P 500?
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Yes. NOW was added to the S&P 500 in November 2019 after meaningful market cap growth. It is now consistently a top-50 S&P 500 holding by market cap.
What is ServiceNow's market cap?
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Approximately $200 billion as of early 2026. Market cap has grown several multiples since 2019 driven by consistent 20%+ revenue growth and the AI revenue tailwind. NOW is now one of the largest US enterprise software companies by market cap, behind only Microsoft and Salesforce in major software peers.
Does ServiceNow pay a dividend?
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No. ServiceNow has not paid a dividend historically and has prioritized share buybacks plus continued growth investment. Buybacks have grown materially in recent years. A future dividend has been speculated about but not announced.
Is ServiceNow a SaaS stock?
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Yes, the defining example. ServiceNow is a pure-play subscription software company with multi-year customer contracts, ~95% gross renewal rates, and ~120% net retention. The combination of high recurring revenue durability plus consistent platform expansion (more workflows, more seats, more AI features) is the central thesis.
Should I own ServiceNow directly or through VGT?
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Both common. Direct NOW gives concentrated enterprise software exposure with the AI agent revenue tailwind. VGT includes NOW at ~1.4% along with broader tech sector exposure dominated by Apple, Microsoft, and NVIDIA. For meaningful NOW exposure, direct ownership is necessary; the VGT weight is too small to drive portfolio returns from NOW specifically.
Walnut is informational, not investment advice. Financial figures on this page are approximations; always verify current numbers with ServiceNow, Inc.'s investor relations page or your broker before making investment decisions.