Polen Capital, an investment management company, released its “Polen Focus Growth Strategy” first-quarter 2026 investor letter. A copy of the letter can be downloaded here. The first quarter of 2026 was highly volatile for US equities, driven by AI disruption concerns and the US-Israel conflict in Iran and the Middle East. In this backdrop, the Polen Focus Growth Strategy declined 17.16% in the quarter, compared to a -9.78% return for the Russell 1000 Growth and -4.33% return for the S&P 500. The Strategy focuses on mission-critical businesses with recurring revenue and competitive advantages and capitalizes on the volatility to increase investments in software and semiconductor companies. The Strategy remains confident in the long-term potential of the Portfolio, emphasizing businesses with strong economic moats, robust balance sheets, and multi-year earnings growth. In addition, please check the Strategy’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Polen Focus Growth Strategy highlighted stocks like 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 April 28, 2026, ServiceNow, Inc. (NYSE:NOW) closed at $90.49 per share. One-month return of ServiceNow, Inc. (NYSE:NOW) was -13.02%, and its shares lost 52.62% over the past 52 weeks. ServiceNow, Inc. (NYSE:NOW) has a market capitalization of $93.32 billion.
Polen Focus Growth Strategy stated the following regarding ServiceNow, Inc. (NYSE:NOW) in its Q1 2026 investor letter:
“As agents need access to a company’s mission critical software, the software companies may be able to monetize agentic users just as they do human ones. Companies like Microsoft, ServiceNow, Inc. (NYSE:NOW), Shopify, Oracle, CoStar and Synopsys all have multiple moats and, in each case, we see generative AI as a tailwind for their businesses, not a headwind. We believe the selloff in these businesses in the quarter presented us with attractive buying opportunities in many of the high-quality businesses we own. We also sold Adobe, Intuit and Paycom to redeploy the capital to our highest conviction software names like ServiceNow , Shopify and CoStar Group . The previously discussed price dislocations within the software space have presented opportunities for long term patient investors and we believe it prudent to consolidate some of the portfolio around businesses where we believe the AI disruption concerns are excessive and are unlikely to materially affect their moat. ServiceNow, Shopify and CoStar Group are those types of businesses, in our opinion.
These companies are heavily intertwined into their customers’ workflow (and thus difficult to replace), process/house important data and offer their own enhanced AI solutions. In the case of ServiceNow and Shopify, we believe their respective customers are likely to use their proprietary AI tools rather than try to re-create their own or outsource to an unproven third-party. Both ServiceNow and Shopify are already growing rapidly and we believe have wide open growth potential in enormous markets and AI should be a tailwind for them. We expect these three companies to be among the fastest earnings growers in the Portfolio over the next five years.”
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