Markets did not respond well to Alphabet (GOOG), Amazon (AMZN), Meta Platforms (META), or
Microsoft (MSFT) after they posted results last week. The selling in GOOG and MSFT is especially
disappointing.
Considered the bell-weather and the most cash-flow-rich firms, Google and YouTube face a slowdown as
advertisers cut spending. Google’s CEO said the company will significantly lower hiring compared to Q3.
It must do more than that. I might need to cut staff as advertising revenue worsens.
Google quietly acquired avatar startup Alter for ~ $100 million. The rich purchase price is another
reminder that Google’s research and development efforts are not bearing fruit.
Microsoft warned of a weak PC market and Azure growth. With this slowdown, this software firm is a
mature corporation, not a growth firm.
Technology investors should consider ServiceNow. After peaking at over $700, the firm may grow faster
from here. In Q3, it earned $1.96 a share. Revenue rose by 21.2% Y/Y to $1.83 billion. It reported a
renewal rate of 98%.
ServiceNow is a well-run firm. It operates in a niche sector of enterprise SaaS. After it posted EPS
exceeding estimates, the strong renewal rate is a vote of customer confidence.
Add NOW stock to the watch list. Consider a position if the stock falls after the post-earnings rebound.
