ServiceNow (NOW)

Leader in making companies more efficient. Massive fear that AI would put it out of business. Instead, has incorporated AI right across its platform. Market leader, so it's expensive. Five years from now every major company in the world will be running on an AI platform, and NOW will have a pretty big share. No dividend.

On the cutting edge of using agentic AI. His price target is $185.

One of the S&P's top performers in August. It's rebounded, like most software, after the AI scare. In fact, NOW has integrated AI into its software. Their quarterly reports this year were great.

Story looks materially better after latest results. Latest quarter provided clearest evidence yet that AI can actually make its software more valuable. Revenue growth and contracted future revenue accelerated. Raised full-year outlook. Connecting Claude directly into its platform. Momentum needs to translate into overall growth.

If the run continues, she may trim. 

Chart shows a bigger downtrend, and we're seeing higher lows. Now trying to break above the recent high. Doesn't mind nibbling, but he's concerned we're late in the cycle. A year or two ago, with this chart, he'd be super-bullish. Now you need to limit risk ~$100-105. If it takes out the lows of earlier this year, you want to exit.

But he's worried we're at the tail-end of the 4-year cycle, which means markets will come under pressure, and cyclical areas will likely bear the brunt.

The chart had a double top, fell and is now basing with slightly higher lows. It's not consolidating. Wait for the break out above $123 to buy.

Just starting to move up to the 200-day MA, have to see if it can break through. On the technicals, a bit challenged to be buying right now. A lot has to do with the valuation of ~71x forward PE, with 20% growth rate. Burning question is whether it will be an AI winner long term, or will it be disrupted?

The software rally began with NOW delivering a good quarter. It's up 21% in one week and is on a sustained run, but also triggered rallies in other software names.

Is -38% this year and -60% from it high last year, but after the bell, NOW reported a top and bottom line beat, and revenues accelerating for the first time in 4 quarters. They raised their full-year forecast for subscription revenue. Business is pretty good. Shares bounced after hours.

Better value than a year ago when shares were twice as high as was valuation. But he doesn't know if recent lows will hold or not. The risk/reward as a trade is now compelling. But shares need to return to $140 for him to feel confident.

Software stocks have been struggling for quite some time, and really struggling relative to AI stocks -- huge divergence in performance. RSI has improved, not as bad as it was. Hanging around the middle of the pack, up from the bottom.

He's concerned a lot by the big spike on the chart at the beginning of June, and then it just rolled over. He's cautious.