Best Performing S&P 500 Stock of Last Week - ServiceNow Inc $NOW
ServiceNow (NYSE: NOW) was the top-performing large-cap stock last week, surging over 15% following its Q1 2025 earnings report. The rally was driven by strong financial results, robust demand for AI-driven solutions, and resilience in the face of federal budget tightening.
ServiceNow exceeded expectations with a 19% year-over-year increase in total revenue, reaching $3.09 billion. Subscription revenue, accounting for 97% of total revenue, also grew by 19%, totaling $3.005 billion. Adjusted EPS came in at $4.04, surpassing the consensus estimate of $3.83.
The company reported a 22% year-over-year increase in current remaining performance obligations (cRPO), indicating strong future revenue. This growth is attributed to high customer renewal rates and increased adoption of AI-powered workflow automation tools.
Despite concerns over federal budget tightening, ServiceNow's public sector business grew over 30% year-over-year in net-new annual contract value (ACV). The company secured six new federal customers and closed 11 U.S. federal deals exceeding $1 million, demonstrating its solutions' alignment with government efficiency initiatives.
Company Overview
ServiceNow is a cloud-based software company that specializes in enterprise workflow automation. Originally built to manage IT service requests (like internal help desk ticketing), the company has since expanded aggressively into automating all kinds of business workflows — including human resources onboarding, customer service management, cybersecurity incident response, finance operations, and manufacturing maintenance. At its core, ServiceNow offers a platform-as-a-service (PaaS) where companies can streamline, automate, and optimize their internal processes across departments, helping organizations operate more efficiently at scale.
Unlike Salesforce, which focuses on customer relationship management, or Microsoft Dynamics, which is more ERP-driven, ServiceNow is focused on managing the work itself — the internal approvals, service requests, escalations, and task flows that keep an organization running. Its platform is modular, offering products like IT Service Management (ITSM), Customer Service Management (CSM), HR Service Delivery (HRSD), and Security Operations (SecOps), all built on a shared underlying architecture called the Now Platform. A major differentiator is its low-code/no-code development capabilities, which allow enterprise customers to customize or build their own apps without heavy engineering lift, making ServiceNow highly extensible inside complex environments.
ServiceNow’s value proposition is centered on centralizing fragmented workflows to improve employee productivity, speed up operations, and cut costs. Increasingly, it is embedding AI and machine learning to predict IT outages, automate repetitive tasks, and recommend actions — moving beyond simple workflow digitization into true intelligent automation. Another major growth vector is the public sector, where ServiceNow is securing large federal contracts by helping governments modernize their legacy systems.
Strategically, ServiceNow is positioning itself as the "operating system for enterprise workflows," a sticky, critical part of its customers’ infrastructure. With a subscription-based SaaS model that produces highly predictable recurring revenue, a strong upsell engine within its existing customer base, and an expanding footprint in industries like healthcare, energy, and manufacturing, ServiceNow is well-placed to continue compounding growth even in a slower macro environment. In short, it's no longer just an internal IT tool — it is becoming the central nervous system of modern digital enterprises.