Core Insights - The COO of ServiceNow, Amit Zavery, indicated that some software companies may face consolidation if they fail to transform their businesses to adopt artificial intelligence [1][2] - Zavery emphasized that companies not utilizing the latest technologies and encouraging customer adoption will be at risk of being eliminated from the market [1] - ServiceNow is focused on providing comprehensive AI support, ranging from security to solutions [2] - Zavery highlighted the importance of safe AI, stating that without it, chaos could ensue, and the goal is to ensure that users control AI rather than being controlled by it [2]

When you don't know what to pay for a stock you tend to sell it. Right now, we have people selling technology shares left and right because they are unsure of what they own and what it might be worth. They are looking at the incredible shrinking price-to-earnings ratio — the "multiple" — and they are saying get me out of here. I see it. And not just in tech. What do we pay for Danaher when it buys a company , Masimo, that we have long since disliked, ever since its litigation with Apple over patent infringe ...

Core Insights - The article discusses the impact of rising capital expenditures and narratives of AI disruption on well-known AI-linked tech stocks, questioning whether they represent buying opportunities or value traps [1] ServiceNow - ServiceNow's share price has dropped 45%, leading investors to speculate that AI is negatively affecting its business, but financial results indicate otherwise [2] - In 4Q2025, ServiceNow's subscription revenue grew 21% YoY to US$3.5 billion, with net income increasing 4.4% to US$401 million, attributed to AI adoption [2] - The Annual Contract Value (ACV) of ServiceNow's generative AI suite, "Now Assist," more than doubled YoY, exceeding US$600 million, indicating strong growth rather than disruption [3] - ServiceNow's monthly active users increased by 25% YoY in 4Q2025, suggesting deeper integration within enterprises [3] - The company maintains a high renewal rate of 98%, reflecting customer loyalty and satisfaction with its platform [4] Microsoft - Microsoft experienced a share price decline due to concerns over cloud growth amid rising capital expenditures, with revenue increasing 17% YoY to US$81.3 billion in 2QFY2026 [5] - Net income surged nearly 60% to US$38.5 billion, while capital expenditures rose 66% to US$37.5 billion, outpacing Azure revenue growth of 39% [5] - Microsoft employs a Lifetime Value (LTV) portfolio strategy, focusing on core businesses with higher LTV rather than solely on Azure's rapid growth [6] - The company's long-term operating margin consistently outperforms its cloud provider peers, which is a positive indicator for investors [8] Amazon - Amazon's net sales reached US$213.4 billion in 4Q2025, a 14% YoY increase, with net income rising 6% to US$21.2 billion, driven by growth in AWS, advertising, and retail [9] - Free cash flow fell 71% to US$11.2 billion due to increased capital expenditures for AI investments, but the company is still monetizing its business effectively [10] - Amazon's AWS generated a quarterly growth of 24% YoY to US$35.6 billion, achieving an annualized run rate of US$142 billion, marking its fastest growth in 13 quarters [15] - The customer spending on Amazon Bedrock, its AI model suite, surged 60% quarter on quarter, indicating strong demand for its offerings [15]

Key Takeaways The benchmark S&P hadn't moved much through Tuesday's close. But that quiet action obscures more drama within the index. More than a fifth of the stocks in the index have moved by at least 20% this year, according to a new analysis. Wall Street is behaving like Capitol Hill this year. As of Tuesday’s close, the S&P 500 was down 0.03% since the start of the year. That's about as unexceptional as it gets—but it belies a lot of churn below the surface. According to a recent analysis by ...

Core Viewpoint - ServiceNow CEO Bill McDermott is purchasing $3 million worth of stock, indicating confidence in the company's future and suggesting that there is "no better entry point" for investors [1]. Company Insights - The stock purchase by the CEO is seen as a positive signal for ServiceNow, especially in the context of challenges faced by other software companies [1]. - This move may encourage other executives in the software industry to consider similar investments, potentially stabilizing market sentiment [1].

Core Insights - The software selloff is intensifying, prompting ServiceNow's CEO to purchase shares during the downturn and to join other executives in halting automated stock-selling plans [1] Company Actions - ServiceNow's CEO is actively buying shares, indicating confidence in the company's future despite current market conditions [1] - The decision to end automated stock-selling plans by the CEO and other executives suggests a strategic move to align their interests with the company's long-term performance [1]

Core Viewpoint - Needham maintains a "Buy" rating on ServiceNow, Inc. (NOW) with a price objective of $155, citing strong customer adoption and growth in AI-driven offerings [1][2] Group 1: Analyst Ratings - Mike Cikos from Needham has set a price target of $155 for ServiceNow, indicating confidence in the company's growth potential [1] - Truist has reduced its price objective for ServiceNow from $240 to $175 while maintaining a "Buy" rating, attributing the sector decline to concerns over terminal value rather than immediate fundamentals [3] Group 2: Business Performance - ServiceNow's Pro Plus modules, particularly Now Assist, are seeing healthy customer adoption, with a large US financial services client demonstrating tangible benefits [1] - The annual contract value for Now Assist has exceeded $600 million, indicating strong demand for the company's AI-driven solutions [2] Group 3: Market Context - ServiceNow operates in the cloud-based solutions sector, focusing on digital workflows, which positions it well amid ongoing technological advancements [3]

Group 1: Company Performance - ServiceNow Inc reported Q4 2025 results with revenue of $3.57 billion, a 20.5% year-over-year increase, surpassing Wall Street expectations of $3.53 billion [3] - Earnings per share (EPS) for Q4 2025 was $0.92, exceeding the expected $0.88 [3] - The subscription business, which constitutes the majority of ServiceNow's revenue, grew 21% year-over-year to $3.47 billion [3] Group 2: Future Guidance - ServiceNow anticipates subscription sales for Q1 2026 to be between $3.65 billion and $3.66 billion, indicating a year-over-year growth of 21.5% at the midpoint [4] - The acquisition of Moveworks is expected to enhance subscription revenue by 100 basis points in Q1 2026 and for the full year [4] Group 3: Market Position and Analyst Opinions - Oppenheimer identified ServiceNow as one of the top US software stocks to watch, highlighting its potential to regain momentum through improved execution and strategic initiatives [1] - Truist reduced its price target for ServiceNow from $240 to $175 but maintained a Buy rating, emphasizing the importance of AI adoption for long-term value [2] - The software industry has faced challenges in monetizing AI, but companies like ServiceNow are seen as having significant upside potential [1][2]

Group 1 - Wall Street is misinterpreting the impact of artificial intelligence on enterprise software, leading to unrealistic pricing scenarios where AI tools rapidly replace traditional software platforms [1][2] - Large-cap software stocks, including Salesforce and ServiceNow, have seen significant declines, with shares down over 20% in the past month due to fears of AI disruption [3] - Despite concerns, enterprise customers remain committed to platforms like Salesforce and ServiceNow, with high switching costs and long-term contracts limiting immediate disruption [4] Group 2 - AI monetization in major software firms is still in its early stages and could enhance revenue growth rather than reduce it [4] - Analysts at JPMorgan also believe that the market is overestimating near-term AI disruption risks, suggesting a potential rebound [5] - The sell-off in Salesforce and ServiceNow is viewed as excessive, with both companies expected to play significant roles in the AI revolution [6]

Core Viewpoint - ServiceNow Inc (NYSE:NOW) is highlighted as a strong long-term investment opportunity despite current stock trading near its 52-week low, driven by robust earnings and strategic initiatives [1][5]. Group 1: Company Developments - Danielle Fontaine has been appointed as chief accounting officer and corporate controller, effective February 17 [1]. - ServiceNow reported Q4 2025 earnings with a revenue increase of 20.5% year-over-year to $3.57 billion, supported by a strong subscription business [5]. - Following the strong earnings report, ServiceNow announced a $5 billion increase to its share repurchase program [5]. Group 2: Market Analysis - Morgan Stanley noted that the decline in software valuations, approximately 33% since October 2025, presents buying opportunities, suggesting that concerns over generative AI disruption are overstated [2]. - Analysts from Truist reduced ServiceNow's price target from $240 to $175 while maintaining a Buy rating, indicating that the recent decline in infrastructure software stocks is more about long-term value concerns than immediate fundamentals [3]. - Companies utilizing seat-based models have underperformed, and there is a growing trend towards AI use cases, which is becoming a key strategy for software vendors [4]. Group 3: Competitive Landscape - ServiceNow is among several companies, including Microsoft, Intuit, and Salesforce, identified as attractive investment picks due to strong product cycles, improved financials, and lower valuations [3]. - The company operates in a competitive environment focused on cloud-based and AI-driven solutions aimed at enhancing business workflows and productivity [6].