Exploring ServiceNow, Inc. (NOW) Investor Profile: Who’s Buying and Why?

You're looking at ServiceNow, Inc. (NOW) and asking the right question: who exactly is buying this stock, and what do they see that the average investor might be missing? The short answer is that the smart money is already deeply entrenched, and they're doubling down on the company's role as the enterprise AI platform of choice. Honestly, when you see institutional ownership sitting at a staggering 90.94% as of November 2025, you know this isn't a retail-driven story; it's a conviction play by the biggest players, like The Vanguard Group, Inc. and BlackRock, Inc. Here's the quick math: the company is guiding for full-year 2025 subscription revenue to hit the $12.84 billion midpoint, a number that speaks to massive, sticky corporate contracts, not small-time sales. Plus, they've raised their full-year Non-GAAP Free Cash Flow Margin guidance to 34%, which is a sign of elite-level execution in turning revenue into real cash-a defintely compelling signal for long-term holders. So, are you following the giants who own the vast majority of the shares, or are you waiting for the next earnings cycle to confirm what the institutional filings already tell us?

Who Invests in ServiceNow, Inc. (NOW) and Why?

You're looking at ServiceNow, Inc. (NOW) because the numbers are just too loud to ignore, and you want to know which big players are driving that momentum. The direct takeaway is that ServiceNow, Inc. is overwhelmingly an institutional growth stock, with nearly 90% of its shares held by long-term funds who are betting on its dominance in the AI-driven workflow market.

This isn't a stock for value investors chasing a low Price-to-Earnings (P/E) ratio; it's a bet on sustained, high-margin revenue growth. The high institutional ownership means the stock price is extremely sensitive to the sentiment and actions of these large money managers.

Key Investor Types: The Big Guns Dominate

The ownership structure of ServiceNow, Inc. is a classic profile for a high-growth, large-cap technology company. Institutional investors-the mutual funds, pension funds, and asset managers-hold the vast majority of the company. Honestly, they own the float.

As of late 2025, institutional investors account for roughly 87% to 90% of the shares outstanding. This concentration is a massive vote of confidence, but it also means their collective trading decisions can cause sharp movements. The retail investor, or the general public, holds about 8.6% to 10% of the stock. Hedge funds, surprisingly, do not hold a 'meaningful investment' when compared to the sheer scale of the passive and active institutional funds.

Here's a quick look at the major institutional players and their approximate stakes as of the latest 2025 filings:

• Vanguard Group Inc: Holds around 9.6% of shares, primarily through index funds.
• BlackRock, Inc.: Holds approximately 8.9% of shares, another index fund powerhouse.
• State Street Corp: A significant holder, often tracking major indices like the S&P 500.

Investment Motivations: Betting on AI and Cash Flow

Investors are attracted to ServiceNow, Inc. for three clear reasons: its market position, its aggressive AI-driven growth, and its superior cash flow generation. The company doesn't pay a dividend (payout ratio is 0.00%), so this isn't an income play; it's pure growth.

The Q3 2025 earnings report was a huge catalyst, showing the thesis is playing out. Subscription revenues hit $3.299 billion, representing 21.5% year-over-year growth. Plus, the full-year 2025 subscription revenue guidance was raised to a midpoint of approximately $12.84 billion, signaling strong near-term visibility.

The AI story is defintely a core driver. The Now Assist AI solution is on pace to exceed $500 million in Annual Contract Value (ACV) for the 2025 fiscal year, validating the company's push to become the 'AI platform for business transformation.' This is why institutions are willing to pay a premium. You can dive deeper into these figures in Breaking Down ServiceNow, Inc. (NOW) Financial Health: Key Insights for Investors.

Here's the quick math on profitability:

Investment Strategies: Long-Term Growth and Liquidity

The dominant strategy here is long-term growth investing. The large index funds and mutual funds are essentially buying and holding, believing ServiceNow, Inc. will continue to compound its earnings and expand its market share for years. Their investment horizon is measured in decades, not quarters.

The company's premium valuation, with a forward P/E ratio often well over 45x, means investors are pricing in this massive future growth. They are willing to accept a high multiple today for the expectation of a much larger, more profitable company tomorrow. This strategy hinges on the company consistently delivering on its Remaining Performance Obligations (RPO), which hit approximately $24.3 billion in Q3 2025, providing a huge backlog of future revenue.

The recent announcement of a five-for-one stock split, subject to shareholder approval in December 2025, also plays into a secondary strategy: appealing to retail and increasing liquidity. A lower per-share price makes the stock more accessible to individual investors, potentially broadening the shareholder base and facilitating smaller, more frequent trades, which is a key consideration for portfolio managers.

Institutional Ownership and Major Shareholders of ServiceNow, Inc. (NOW)

You need to know who the big players are in ServiceNow, Inc. (NOW) because they own the vast majority of the company, and their trading moves the stock price. As of late 2025, institutional investors-the mutual funds, pension funds, and asset managers-control a massive chunk, holding around 90% of the shares outstanding. This level of concentration means their conviction is a huge vote of confidence, but it also makes the stock price highly sensitive to their collective trading actions.

The biggest institutional holders are the giants of the asset management world, the ones who track major indices like the S&P 500. Honestly, they are the ones who set the tone. The top three alone account for a significant portion of the total institutional stake, but no single entity holds a majority, which is a healthy sign of dispersed control among the big guns.

Here's the quick math on the top institutional owners as reported in Q3 2025 filings, which gives you a clear picture of who is truly in control of the share registry:

Notice that The Vanguard Group, Inc. and BlackRock, Inc. are neck-and-neck, each holding over 9% of the company. This is defintely a classic pattern for a large-cap tech stock that is a core component of index funds and exchange-traded funds (ETFs). If you want to dive deeper into the fundamentals that justify these massive holdings, you can check out Breaking Down ServiceNow, Inc. (NOW) Financial Health: Key Insights for Investors.

Recent Shifts: Institutional Buying Momentum

The story of institutional ownership in 2025 is one of net accumulation. The smart money is leaning in, not pulling back. Over the 12 months leading up to August 2025, institutions purchased $41.08 billion worth of ServiceNow, Inc. stock while selling only $18.86 billion, resulting in a net capital inflow of over $22 billion. That's a strong signal.

This accumulation trend continued through the third quarter of 2025. For instance, smaller but active firms are also making big moves: IAG Wealth Partners LLC raised its position by an eye-watering 200.0% in Q3, and Bogart Wealth LLC lifted its stake by 93.8% in the same period. Earlier in the year, even a major player like Goldman Sachs boosted its holdings by 131.4% in Q1 2025. This shows conviction across the board, from passive index funds to active managers.

• Net institutional inflow exceeded $22 billion in the last year.
• Active managers are aggressively increasing positions.
• The buying is tied directly to the company's AI-driven growth narrative.

How Large Investors Shape ServiceNow's Strategy and Stock

Institutional investors are more than just large shareholders; they are a critical force shaping ServiceNow, Inc.'s stock price and corporate strategy. Their high ownership-around 90%-means the stock price is acutely sensitive to their collective sentiment and trading. When one or two large institutions sell, it can create a noticeable downward pressure, but the current net buying trend provides a substantial floor for the stock.

More importantly, these investors are buying into a specific narrative: the company's leadership in enterprise AI. Their sustained investment is a direct endorsement of the company's strategy to monetize artificial intelligence. ServiceNow, Inc. is on track to hit its goal of $1 billion in Annual Contract Value (ACV) from its AI products by 2026, a tangible target that justifies the premium valuation these large investors are willing to pay. Their confidence helps maintain the stock's high valuation multiples, like its elevated price-to-earnings ratio (P/E), by pricing in aggressive future growth. The risk, of course, is that any perceived lag in GenAI adoption could lead to a sharp sell-off, but for now, their money is betting on execution.

Key Investors and Their Impact on ServiceNow, Inc. (NOW)

The investor profile for ServiceNow, Inc. (NOW) is dominated by institutional money, a common trait for high-growth, large-cap technology stocks. This isn't retail speculation; it's the big funds placing a long-term bet on the enterprise workflow and Artificial Intelligence (AI) narrative. As of late 2025, institutional investors own approximately 90% of the company's shares outstanding, underscoring a massive vote of confidence in the platform's mission-critical status.

You need to know who the largest players are because their collective trading actions can, and do, move the stock price. The top three institutional holders-Vanguard Group Inc, BlackRock, Inc., and State Street Corp-are primarily passive index managers. This means their holdings are less about a single analyst's conviction and more about ServiceNow, Inc.'s inclusion in major indices like the S&P 500. Their sheer size, however, provides a bedrock of stability for the stock.

Here's the quick math on the top three institutional holders, based on the most recent 13F filings as of Q3 2025:

The Influence of Institutional Ownership

With nearly 90% of the stock held by institutions, ServiceNow, Inc. is highly sensitive to shifts in professional investor sentiment. The good news is that no single shareholder has dominant control; the top 24 investors collectively hold about 50% of the company. This diversified institutional base prevents any one fund from dictating strategy, pushing management to focus on broad, market-pleasing growth initiatives, especially in AI.

Their influence manifests not through public activism, but through capital allocation decisions. For example, the Board of Directors approved a five-for-one stock split in October 2025, subject to a December 5, 2025 shareholder vote. This is a classic move to increase the stock's accessibility, making it easier for smaller institutional funds and retail investors to buy in, which ultimately supports the stock price. It's a direct response to the market's desire for broader participation.

Recent Investor Moves and the AI Rotation

The most telling recent moves reflect a clear trend: big money is betting on ServiceNow, Inc.'s AI monetization story, even amidst broader market rotation. In the first half of 2025, we saw significant new capital pour in, highlighting conviction in the platform's future.

• Norges Bank, a major sovereign wealth fund, acquired a new stake worth approximately $2.589 billion in Q2 2025.
• Nuveen LLC also acquired a new position valued at about $1.817 billion in Q1 2025.
• Goldman Sachs Group Inc. aggressively boosted its position by 131.4% in Q1 2025, accumulating a holding valued at over $1.178 billion.

To be fair, some Q3 2025 investor letters, like the one from RiverPark Large Growth Fund, noted that ServiceNow, Inc. shares were weaker as some investors rotated toward 'higher beta AI hardware and semiconductor names' and out of 'legacy' software. But the company's Q3 2025 results, with subscription revenue hitting $3.30 billion and AI products on pace to exceed $0.5 billion in Annual Contract Value (ACV) this year, show the core thesis is executing. The smart money is watching the AI ACV number as the key indicator. If you want a deeper dive into the company's fundamentals, you should check out Breaking Down ServiceNow, Inc. (NOW) Financial Health: Key Insights for Investors.

The takeaway is that while the stock might see temporary weakness from sector rotation, the largest, most defintely long-term institutional investors are accumulating or maintaining huge positions, validating the company's role as a foundational AI platform for the enterprise. You should focus on the continued growth in Current Remaining Performance Obligations (cRPO), which hit $11.35 billion in Q3 2025, as a proxy for future revenue visibility.

Market Impact and Investor Sentiment

You're looking at ServiceNow, Inc. (NOW) and trying to figure out if the big money is still buying, and honestly, the answer is a nuanced but defintely positive one from the institutional side. The core takeaway is that major shareholders are overwhelmingly bullish on the company's long-term growth, especially its position as an enterprise AI platform, but the market is still wrestling with its premium valuation.

As of late 2025, institutional investors-the mutual funds, pension funds, and asset managers-own a massive portion of the company, holding between 87.18% and 90% of ServiceNow's stock. This level of concentration is a huge vote of confidence, signaling that the smart money views ServiceNow as a core, long-duration holding in the software sector.

The largest asset managers are doubling down. Vanguard Group Inc., the top institutional owner, increased its stake by 1.6% during the third quarter of 2025, bringing its total holdings to 20,210,924 shares valued at approximately $18.59 billion. BlackRock, Inc. is right behind them, holding 19,182,102 shares with a market value of roughly $17.65 billion as of Q3 2025. You don't see that kind of conviction unless the growth story is rock solid. The company's Mission Statement, Vision, & Core Values of ServiceNow, Inc. (NOW) clearly align with this long-term growth narrative.

• Vanguard is the largest holder.
• BlackRock is the second largest holder.
• Institutional conviction remains high.

Recent Market Reactions and Investor Divergence

Here's the realist check: despite the institutional accumulation, the market hasn't been rewarding the stock consistently in the near-term. ServiceNow reported Q3 2025 earnings with revenue of $3.41 billion and earnings per share (EPS) of $4.82, both beating consensus estimates. But, the market reaction was bearish, and the stock continued to take hits, which is a classic disconnect between strong fundamentals and valuation concerns. The stock was trading around $860.67 in November 2025, down from its 52-week high of $1,170.39.

This mixed signal is also visible in the insider activity. While institutions are net buyers, company insiders-executives and directors-have been selling. For example, the CEO sold 5,825 shares for over $5.33 million in August 2025, and a director sold shares worth over $1 million around the same time. What this estimate hides is that insider selling often relates to pre-scheduled compensation plans, but still, it signals a reduced confidence or strategic reallocation at the top.

Here's a quick look at the top institutional positions as of Q3 2025, showing their commitment:

Analyst Perspectives: The AI-Driven Outlook

The analyst community is largely on the side of the institutions. The consensus rating is a 'Moderate Buy,' with an average price target of $1,159.66 as of November 2025. That implies a substantial potential upside of over 33% from the current trading price. The buy-side argument is simple: the company is the 'platinum standard' for enterprise AI, which is the next big spending cycle for corporations.

The bullish case is anchored in the company's GenAI-driven innovation and strong revenue trajectory, especially as it converts its current remaining performance obligations (cRPO) of $10.31 billion (as of Q1 2025) into realized revenue. They are betting on the platform's ability to unlock full enterprise automation, a huge market. Still, there is a divergence. While most analysts have a 'Buy' rating (31 Buy, 4 Hold, 1 Sell), some firms, like Guggenheim, have downgraded the stock and slashed their price target to $640, warning of delayed GenAI adoption and potential revenue guidance cuts. This is the classic high-growth, high-multiple stock risk: if the future growth engine sputters even a little, the stock gets hit hard.

To be fair, the divergence in price targets-from the low $640 to a high of $1,250-shows the market is split on how quickly the GenAI monetization will materialize. Your action here is to monitor the adoption rates of their GenAI solutions in the Q4 2025 earnings report. Finance: track the year-over-year growth in customers with over $5 million in Annual Contract Value (ACV) by the end of the fiscal year.