Polar Capital Exits ServiceNow Holding, Warns AI Threat Endangers Software Firms
Polar Capital’s $12 billion tech fund, which beat 99% of peers over one year and 97% over five, has sold its entire application software sector holdings, including ServiceNow, citing existential AI threats. The manager retains only a small Microsoft position and shifted to semiconductors and data-centre infrastructure names.
1. Fund Manager’s AI Warning
Nick Evans, manager of a $12 billion global technology fund, warns that advanced AI coding tools can replicate and modify most enterprise software. He views application software as facing an existential threat from AI-driven in-house development and startup competition.
2. Portfolio Rebalancing
After outperforming 99% of peers over one year and 97% over five, the fund sold all application software positions—including ServiceNow, SAP, Adobe and HubSpot—retaining only a small Microsoft stake. It reallocated capital to semiconductors, networking gear, fiber optics and data-centre power infrastructure.
3. Implications for ServiceNow
Removal from such a top-performing fund underscores concerns about ServiceNow’s long-term valuation amid AI disruption. Potential cash-compensation strains and competition from in-house AI tools may pressure growth prospects and equity-based hiring models.