NOW Stock Rises Overnight: Trump’s ServiceNow Stake Fuels Retail Buzz Around SAAS Comeback

• ServiceNow shares jumped 4% in overnight trading.
• Investors appear to be trimming positions in semiconductor stocks, which had surged sharply in recent weeks, and rotating into beaten-down SAAS names, according to user commentary on Stocktwits.
• Retail sentiment for NOW jumped to ‘extremely bullish,’ up from ‘neutral’ on Friday.

ServiceNow (NOW) stock jumped 4% in overnight trading ahead of Monday’s session as retail traders cheered President Donald Trump’s disclosed stake in the company amid growing optimism around a rebound in beaten-down software stocks.

The NOW ticker saw fresh bullish commentary on Stocktwits as of Sunday evening, with many traders arguing that ServiceNow remains among the most undervalued stocks in the software space and is poised for a rebound. 

NOW Leading SAAS Rebound, Traders Say

“$PATH SAAS apocalypse is cancelled and was dumb in the first place. If you haven’t noticed the sector rotation starting, it is. And it’s still early to get in. $NOW $CRM $WDAY $MSFT all have plenty of room to run up from this dip but my favorite is PATH for outsized returns from here,” a trader said.

Another wrote: “$NOW green in a sea of red…tells you all you need to know.” Others said investors appeared to be trimming positions in semiconductor stocks, which had surged sharply in recent weeks, and rotating into beaten-down software-as-a-service (SAAS) names. “True  - there has been some rotation out of chips into other sectors like Software (with $NOW and other beneffiting),” said a trader.

Year to date, the iShares Semiconductor ETF (SOXX), which tracks chip stocks, has surged 68%, with companies such as Intel roughly tripling and SanDisk soaring nearly sixfold over the same period. In comparison, the iShares Expanded Tech-Software Sector ETF (IGV) has declined 15%.

Retail sentiment for NOW shifted to ‘extremely bullish,’ up from ‘neutral’ on Friday, amid ‘high’ message volume. Traders were eyeing a reclaim of the key $100 level after the stock rallied more than 9% over the last two sessions to close Friday at $95.07.

Investors Note Trump’s Q1 Stock Purchases 

Last week, a disclosure released by the U.S. Office of Government Ethics said President Doanld Trump invested in a plethora of software and technology stocks in the first quarter. On Feb. 10, Trump purchased between $1 million and $5 million worth of shares of ServiceNow, Adobe, and Workday.

Meanwhile, ServiceNow said on Friday it completed a $4 billion bond sale, enhancing the company's funding flexibility for investment and buybacks.

NOW Fundamentals Show Strength

ServiceNow posted 22% revenue growth in the first quarter but projected the integration of Armis weighing on its margins this year. The growth, as well the subscription revenue forecasts for the second quarter and the full year, was ahead of analysts’ expectations.

In Februrary, CEO Bill McDermott acquired $3 million worth of ServiceNow shares, while key executives, including the President and CFO Gina Mastantuono, cancelled their automatic 10b5-1 stock sale plans.

The previous month, ServiceNow authorized an additional $5 billion share repurchase authorization, with an immediate $2 billion Accelerated Share Repurchase (ASR). 

ServiceNow shares are down 38% year to date, as of their last close.

For updates and corrections, email newsroom[at]stocktwits[dot]com.