ServiceNow (NOW) Suffered from “Death Of Software” and ” AI Seat Contraction” Narrative

2 weeks ago 17

Soumya Eswaran

Thu, April 16, 2026 astatine 11:01 AM CDT 3 min read

Lakehouse Capital, a Sydney-based concern manager, published its “Lakehouse Global Growth Fund” capitalist missive for February 2026. A transcript of the missive tin beryllium downloaded here. February proved to beryllium a pugnacious period for the Fund, chiefly due to the fact that of the ongoing “AI disruption” narrative. During this period, the Fund's nett worth declined by 14.6% aft fees and expenses, whereas its benchmark, the MSCI All Country World Index Net Total Returns (AUD), fell by lone 0.4%. The Fund’s quality-growth concern benignant is facing pressure, particularly successful endeavor software, owed to concerns implicit AI perchance replacing accepted software. However, the Fund believes that bundle companies with mission-critical endeavor platforms tin leverage their strengths to thrive successful an AI-driven world. Consequently, the Fund accrued its holdings successful companies that are much resilient than the marketplace perceives. Despite the alteration successful marketplace worth of the portfolio, the Fund believes that the cardinal maturation of the holdings remains healthy. In addition, delight cheque the Fund’s apical 5 holdings to cognize its champion picks successful 2026.

In its first-quarter 2026 capitalist letter, Lakehouse Global Growth Fund highlighted stocks similar ServiceNow, Inc. (NYSE:NOW). ServiceNow, Inc. (NYSE:NOW) is simply a cloud-based bundle institution that provides a level for automating and managing integer workflows. On April 15, 2026, ServiceNow, Inc. (NYSE:NOW) closed astatine $94.19 per share. One-month instrumentality of ServiceNow, Inc. (NYSE:NOW) was -16.84%, and its shares mislaid 39.01% implicit the past 52 weeks. ServiceNow, Inc. (NYSE:NOW) has a marketplace capitalization of $98.52 billion.

Lakehouse Global Growth Fund stated the pursuing regarding ServiceNow, Inc. (NYSE:NOW) successful its Q1 2026 capitalist letter:

ServiceNow is simply a class starring US bundle concern that automates analyzable firm workflows crossed IT, HR, and lawsuit service. It acts arsenic a profoundly embedded integer inferior for the world's largest enterprises, with 80% of the G2000 arsenic customers and manufacture starring renewal rates astir 98% – underscoring the ngo captious quality of their platform. Recently, ServiceNow has experienced a important drawdown owed to the "death of software" and AI “seat contraction" narrative.

However, its quarterly results released astatine the extremity of January came successful up of some its ain guidance and expert expectations. Revenues grew 19.5% successful changeless currency presumption to US$3.6 cardinal and operating nett grew 31% to US$1.1 billion. Crucially, the institution straight countered the AI "seat contraction" / AI “loser” communicative by disclosing monthly progressive users connected the level grew 25% year-on-year and that their caller AI solutions deed US$600 cardinal successful yearly declaration worth (ACV). This exceeded their US$500 cardinal people acceptable for 2025 and absorption besides noted they are connected way to transcend their US$1 cardinal ACV people for 2026..." (Click present to work the afloat text)

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