📈 ServiceNow's AI-Fueled 15% Pop

Google beats Q1 estimates, raises dividend, UPS strikes $1.6B deal for Andlauer, Thermo Fisher making $2B investment in US manufacturing, Perplexity AI enters smartphone market, ServiceNow shares surge on strong Q1 results

Author

Evelio Silvera
April 25, 2025

Good morning.

⚡ The Fast Five → Google beats Q1 estimates, raises dividend, UPS strikes $1.6B deal for Andlauer, Thermo Fisher making $2B investment in US manufacturing, Perplexity AI enters smartphone market, ServiceNow shares surge on strong Q1 results

🔎 Market Trends → Wall Street ends higher on tech boost, easing tariff tensions; US Futures Hold Steady After Two-Day Rally

And now…

⏱️ Your 5-minute briefing for Friday, April 25, 2025:

MARKET BRIEF
Before the Open

As of market close 04/24/2025.

Pre-Market

  • ServiceNow (NOW) with a nearly 16% increase, making it the best performer on the S&P 500.

  • IBM (IBM) with a 6.6% drop, following a decline in first-quarter earnings.

Fear & Greed

 

Markets in Review

Tech Leads Markets Higher as Wall Street Shakes Off Uncertainty

Stocks notched a third straight day of gains, with the Nasdaq climbing 2.7% to 17,166, the S&P 500 rising 2% to 5,484.8, and the Dow up 1.2% to 40,093.4. Tech surged 3.5%, leading all sectors except for consumer staples.

The Big Picture:

Markets are regaining altitude, powered by robust corporate earnings and falling yields. Despite headlines swirling around tariffs and inflation, investors found comfort in resilient demand, particularly in tech and industrials.

US durable goods orders surprised to the upside in March, bolstered by strong commercial aircraft bookings—a signal that business investment hasn’t been grounded by macro worries. Meanwhile, Treasury yields retreated, offering support for rate-sensitive growth stocks.

WTI crude rose 0.8% to $62.76, while gold added 1.7% to $3,351.4. A softening dollar and shifting risk sentiment are nudging investors back toward hard assets.

Market Movers:

  • ServiceNow (NOW) soared nearly 16%, the top S&P 500 performer, after a Q1 beat driven by AI demand.

  • Hasbro (HAS) jumped 15% after a Disney (DIS) partnership extension and strong earnings.

  • IBM (IBM) fell 6.6% despite rising revenue, as profit declined and guidance failed to excite.

What They’re Saying:

“Despite the mounting uncertainties, firms were clearly tariff front-running,” said BMO’s Priscilla Thiagamoorthy, pointing to surging durable goods orders as a sign of corporate confidence.

WHAT WE’RE WATCHING
Events

  • There are no events scheduled for today.

Earnings Reports

  • Today: AbbVie, Colgate-Palmolive, Charter Communications, Phillips 66, AutoNation

  • Monday: Domino’s Pizza, Waste Management, NXP Semiconductors, F5, Brown & Brown

MARKET BRIEF
Leading News

ServiceNow's AI-Fueled Rally Signals a New Market Darling

Photo Credit: Lionel Ng/Bloomberg

Why it matters:

ServiceNow's impressive earnings reveal how enterprise AI platforms can deliver real growth even amid economic uncertainty, potentially offering investors a shelter from broader market volatility.

Zoom Out:

The workflow automation pioneer just delivered a 19% revenue jump to $3.09 billion, with adjusted earnings soaring to $4.04 per share—handily beating Wall Street expectations. ServiceNow's remaining performance obligations reached $10.3 billion, growing 22% year-over-year, suggesting the company's customer relationships are deepening.

More telling is ServiceNow's performance amid the new administration's cost-cutting initiatives. While many tech firms nervously eye potential government spending reductions, ServiceNow's public sector business grew 30%, including 11 federal deals exceeding $1 million.

Key Insights:

  • AI transformation is real money: Unlike many tech firms making nebulous AI promises, ServiceNow is converting digital transformation needs into substantial contracts—508 customers now contribute approximately $5 million in annual contract value.

  • Government efficiency paradox: CEO Bill McDermott reports "very positive" discussions with Elon Musk's Department of Government Efficiency (DOGE), suggesting ServiceNow could benefit from—rather than suffer under—the new administration's cost-cutting measures.

  • Prudent guidance: Management is only flowing through "part of those benefits into our full-year outlook," demonstrating the kind of conservative forecasting that often precedes continued earnings surprises.

Market Pulse:

"The common thread is that ServiceNow is set up for sustainable growth as the market's leading enterprise AI platform," notes McDermott, signaling confidence despite the stock's 12% year-to-date slump.

Bull’s Take:

ServiceNow's ability to grow rapidly while maintaining pricing power suggests investors should view the current 15% pop not as a ceiling but a floor. Smart money is recognizing that genuine AI value creation trumps macroeconomic headwinds.

Headlines

  • Amazon and Nvidia say AI data center demand is not slowing down (link)

  • Volkswagen and Uber partner to deploy autonomous ID. Buzz (link)

  • Perplexity AI enters the smartphone market with Motorola partnership (link)

  • Meta lays off employees working on virtual reality in Reality Labs division (link)

  • UPS deepens healthcare push with $1.6 billion deal for Canada's Andlauer (link)

  • Thermo Fisher counters tariffs with $2bn investment into US manufacturing (link)

  • Google beats Q1 estimates, raises dividend 5%, and authorizes $70 billion in buybacks (link)

CRYPTO
Fear & Greed

 

Headlines

  • Fed Joins OCC, FDIC in Withdrawing Crypto Warnings for U.S. Banks (link)

  • SOL Strategies stock jumps 25% following $500 million raise to buy more Solana (link)

  • PayPal, Coinbase partner to eliminate trading fees on PYUSD in bid to boost adoption (link)

DAILY SHARE
On the Socials

*Hat-tip to netcapgirl