Broyhill Maintains Confidence in ServiceNow (NOW). Here’s Why

Broyhill Asset Management, a Charlotte-based firm, asserts confidence in ServiceNow, Inc. (NYSE:NOW) in its Q2 2026 investor letter. The company's Composite increased 8.8% in Q2, whereas the MSCI All Country World Index rose 15.1% and the MSCI ACWI Value Index climbed 10.8%. For the first half of the year, the Composite returned 2.3%, while the Index gained 11.5%.

ServiceNow's recent gains are attributed to tech, especially semiconductors, according to Broyhill. The asset management firm does not directly invest in semiconductors but may consider the sector if opportunities become available. Broyhill's investment philosophy emphasizes capital protection during uncertain market conditions.

ServiceNow, Inc. (NYSE:NOW), a cloud-based software company, provides a platform for automating and managing digital workflows. On September 14, 2026, the stock closed at $142.35 per share. Over the past month, ServiceNow's shares rose 18.32%, but they dropped 24.15% over the past year. The company's market capitalization is $147.19 billion, and its stock has fluctuated between $81.24 and $194.73 over the past 52 weeks.

Broyhill notes that ServiceNow fell 21% in May, which is atypical for the software sector. The general argument against software investments, such as this, does not apply to ServiceNow. In Q2 2026, the company's annual contract value target grew by 50% to $1.5 billion, and customers spending over $1 million on it increased by 130% year-over-year. More than half of the new business now utilizes a consumption-based pricing model instead of seat-based pricing. ServiceNow's gross renewal rate stands at 97%.

The asset management firm exited other related investments where they could not confidently frame the range of outcomes (HubSpot and Intuit) but added to ServiceNow. ServiceNow is not among the top 40 most popular stocks among hedge funds. Broyhill acknowledges the potential of ServiceNow as an investment but believes that certain AI stocks offer greater upside potential and less downside risk.