Brown Advisory, an investment management company, released its “Brown Large-Cap Growth Strategy” for the first-quarter 2026 investor letter. A copy of the letter is available to download here. The Brown Advisory Large-Cap Growth Strategy experienced a decline in the first quarter of 2026, modestly trailing the Russell 1000 Growth Index. Despite negative absolute returns amidst volatility, relative performance improved significantly as the quarter progressed. Initial pressures stemmed from weaknesses in the software sector, affected by concerns over AI disrupting traditional models. Conversely, sectors like Industrials and Consumer Discretionary positively contributed to performance, while Information Technology and Health Care were the largest detractors. The strategy’s ability to outperform in a down market indicates the quality of holdings. As market leadership broadens, the firm’s focus remains on maintaining a diversified portfolio of high-quality growth companies, aiming for strong long-term results. Please review the Strategy’s top five holdings to gain insights into their key selections for 2026.
In its first-quarter 2026 investor letter, Brown Advisory Large-Cap Growth Strategy highlighted ServiceNow, Inc. (NYSE:NOW). ServiceNow, Inc. (NYSE:NOW) is a cloud-based software company that provides a platform for automating and managing digital workflows. On July 2, 2026, ServiceNow, Inc. (NYSE:NOW) closed at $106.32 per share. One-month return of ServiceNow, Inc. (NYSE:NOW) was -5.45%, and its shares lost 49.11% over the past 52 weeks. ServiceNow, Inc. (NYSE:NOW) has a market capitalization of $109.65 billion.
Brown Advisory Large-Cap Growth Strategy stated the following regarding ServiceNow, Inc. (NYSE:NOW) in its Q1 2026 investor letter:
“We exited ServiceNow, Inc. (NYSE:NOW) as part of a broader effort to refine our positioning within software, where evolving competitive dynamics and the pace of AI innovation have increased uncertainty across the sector. While the company continues to execute well, we chose to reduce exposure to areas where AI-driven change may weigh on long-term growth and investor sentiment. We redeployed capital into Palo Alto Networks, which we believe is better positioned over the long term.”
ServiceNow, Inc. (NYSE:NOW) ranks 25 on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 108 hedge fund portfolios held ServiceNow, Inc. (NYSE:NOW) at the end of the first quarter, compared to 118 in the previous quarter. In the first quarter of 2026, ServiceNow, Inc.’s (NYSE:NOW) subscription revenues increased 19% year-over-year to $3.67 billion. While we acknowledge the risk and potential of ServiceNow, Inc. (NYSE:NOW) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ServiceNow, Inc. (NYSE:NOW) and that has 10,000% upside potential, check out our report about this cheapest AI stock.