Rahul Nambiampurath, a Trading.biz analyst, has his eyes set on key stocks that might be on the verge of reaching key buy levels amid the AI euphoria. ServiceNow, an Enterprise Software Firm, has his unhindered attention following a robust earnings report and optimistic sales projections.
“ServiceNow’s Q4 2023 earnings report, released on January 24, 2024, included robust guidance for Q1 2024 — a move that reflected confidence in the market positioning and growth trajectory,” mentions Rahul. Here are the key insights for 2024 that the analyst identified from the earnings report:
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Projected 2024 subscription revenue for the entire year to go up to $10.575 billion, a growth of almost 22%.
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Non-GAAP 2024 operating margin is estimated at 29%, almost 3 percent above the consensus estimates.
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2024’s subscription gross margin to be around 84.5%, higher than Wall Street estimates
According to Rahul, these strong guidance figures make ServiceNow a relatively optimistic buy for the short-to-mid-term.
ServiceNow’s (NOW) Price Action
NOW is trading at $757.68, a tad higher than the 50-day EMA line. This line is currently acting as strong support, and a rebound above it should make NOW poised for some quick short-term gains.
ServiceNow Price action: TradingView
NOW is still trading inside the ascending wedge pattern, and a move above the upper trendline—the $825 level—should signal a breakout. At present, traders should keep a close eye on the $751 level, which, if breached, can signal a sell-off, helping buyers enter at a lower price.
ServiceNow’s next quarterly earnings report will be released on April 23, 2024, post which the $800 level might be breached.
Other AI Stocks To Consider
Besides ServiceNow and the hailed NVIDIA (NVDA), which made all the noise in 2024, several other AI players look good for mid-term trading. Some of the notable names include Advanced Micro Devices, Inc. (AMD), Microsoft (MSFT), and Alphabet (GOOG).
Among these picks, AMD has already surged by over 20% month-on-month and might still have the legs to go higher. MSFT is trading flat month-on-month, and it would be interesting to see how it moves in the days to come. GOOG, on the other hand, is trading at an 8% discount month-on-month, which might be optimistic for the buyers.
Braden Dennis, CEO of Finchat, has this to say about ServiceNow (NOW):
“ServiceNow has just been chugging along.
ARR and large customer count have been compounding at >40% since 2012.
I still don’t *really* understand what they do. But stock price and KPIs go brrrrr.”
