Investment Manager Takes a Big Step Back From Software Giant

Shaker Investments reduced its position in ServiceNow (NYSE:NOW) by 2,910 shares during the quarter, an estimated $2.72 million trade based on the average price for the quarter, according to an SEC filing dated October 17, 2025.

What Happened

An SEC filing published October 17, 2025, shows Shaker Investments sold 2,910 shares of ServiceNow during the quarter. The estimated value of shares sold, based on the average closing price for the quarter, was approximately $2.72 million. The fund now holds 838 shares, valued at $771,195.

What Else to Know

This transaction leaves ServiceNow at 0.31% of the fund’s 13F assets under management.

Top holdings after the filing:

• AX: $33.84 million (13.5% of AUM) as of September 30, 2025
• AVGO: $12.30 million (4.9% of AUM) as of September 30, 2025
• NVDA: $12,301,219 (4.9% of AUM) as of September 30, 2025
• MSFT: $8,486,093 (3.4% of AUM) as of September 30, 2025
• GOOGL: $8,297,003 (3.3% of AUM) as of September 30, 2025

As of October 16, 2025, shares were priced at $894.49, down 2.65% over the past year; shares have underperformed the S&P 500 by 17.6 percentage points.

Company Overview

Company Snapshot

ServiceNow, Inc. is a leading provider of cloud-based workflow automation and enterprise IT service management solutions, with a market capitalization exceeding $187 billion as of October 17, 2025 and annualized revenue exceeding $12 billion. The company's scalable Now platform enables organizations to automate complex business processes and improve operational efficiency through integrated AI and analytics. ServiceNow's focus on innovation and broad industry reach positions it as a strategic partner for digital transformation initiatives worldwide.

The company offers enterprise cloud computing solutions, including workflow automation, IT service management, AI-driven analytics, and security operations on the Now platform. It also provides products and services aimed at digital transformation and operational efficiency for large organizations.

ServiceNow serves a global customer base across government, financial services, healthcare, telecommunications, manufacturing, technology, and education sectors.

Foolish Take

Shaker Investments recently reduced its ServiceNow stock position by about 2,900, or $2.7 million, leaving 838 shares, or roughly $770,000 in its portfolio. Here's what retail investors need to know.

By cutting its exposure to ServiceNow stock by about 75%, Shaker is clearly indicating that the stock is no longer a priority in their portfolio. Indeed, it wouldn't be a surprise to see Shaker sell the remaining shares of ServiceNow in its next filing.

It's also not a surprise that the portfolio managers are cutting back on exposure to ServiceNow given its recent performance history. Shares have declined by about (15%) year-to-date, while the S&P 500 has advanced by 14%. That's a stark underperformance, but it is not shocking considering ServiceNow's business model.

The company relies on its Now platform, selling modules including its workflow automation tools, IT service software, and security systems. However, with organizations increasingly shifting their spending to artificial intelligence (AI), traditional software could be at risk. At the very least, market sentiment is shifting away from legacy software companies to those at the cutting edge of the AI revolution.

In other words, this institutional sale is in line with an ongoing trend, where market participants are anticipating greater returns for AI innovators, and slowing sales for traditional software companies.

In any event, retail investors -- no matter their personal opinion on AI -- should be aware of this shift in market sentiment among institutional investors and its potential impact on software stocks like ServiceNow.

Glossary

13F assets under management: The value of assets reported by institutional investment managers in quarterly SEC Form 13F filings.
AUM (Assets Under Management): The total market value of investments managed by a fund or investment firm.
Top holdings: The largest investments in a fund's portfolio, typically by market value or percentage of assets.
Quarter: A three-month period used for financial reporting and analysis, such as Q1 (January–March).
Workflow automation: Technology that streamlines and automates business processes to increase efficiency and reduce manual effort.
IT service management: The practice of designing, delivering, and managing IT services to meet organizational needs.
AI-driven analytics: The use of artificial intelligence to analyze data and generate insights for decision-making.
Digital transformation: The adoption of digital technology to improve business processes, culture, and customer experiences.
Operational efficiency: The ability of an organization to deliver products or services in the most cost-effective manner.
Now platform: ServiceNow's cloud-based platform for automating workflows and integrating business processes.
TTM: The 12-month period ending with the most recent quarterly report.

Jake Lerch has positions in Alphabet and Nvidia. The Motley Fool has positions in and recommends Alphabet, Axos Financial, Microsoft, Nvidia, and ServiceNow. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.