RJ Hamster
New Tesla Startup
Dear Reader,
Pull up Tesla’s most recent SEC filing. Page 5.
And you’ll see a single line showing $12 billion in revenue from a brand-new “super startup” Elon Musk has been quietly incubating inside Tesla.
This new “super startup” has nothing to do with cars, or robots, or space or AI…
But it sits at the center of what Blackstone calls “a $23 trillion investment opportunity.”
And on July 22, Elon is expected to pull back the curtain and reveal exactly what he’s building.
But former hedge fund manager Adam O’Dell already knows… and he reveals it all in this urgent video.
Adam believes this will go down as Elon’s greatest ever invention, and his biggest ever disruption…
And that investors who position themselves before this becomes front-page news could walk away wealthier than they ever thought possible.
Go here to watch Adam’s full briefing now… And he’ll even give you the name and ticker of one of his top picks to play it – completely free.
Regards,
Adam O’Dell
Chief Investment Strategist, Money & Markets
FEATURED
ServiceNow was up 5.9% this morning
Bank of America restarted coverage of ServiceNow yesterday with a Buy rating and a $130 price target. The stock was sitting near $95 at Friday’s close, down roughly 38% year-to-date — a decline driven largely by a market narrative that AI would eventually commoditize enterprise workflow software and that ServiceNow’s pricing power would erode with it. BofA’s analysts came in on the other side of that argument, hard. They’re projecting 18% to 22% revenue growth from 2026 through 2028, and they framed AI not as an existential threat to the company but as the strongest demand tailwind ServiceNow has ever had access to. The market opened today and apparently agreed — NOW is up 5.9% in early trading, pushing above $109, on volume running more than double the daily average with calls leading puts by a significant margin.
That’s the short version of what happened. Here’s the part that actually matters for traders trying to figure out what to do with this.
The Q1 2026 numbers reported in late April are worth sitting with for a moment. Total revenue came in at $3.77 billion, up 22% year-over-year. Subscription revenue — roughly 97% of total sales — hit $3.671 billion, also up 22% year-over-year and 19% in constant currency. Non-GAAP operating margin was 32%. Free cash flow margin was 44%, with $1.67 billion in free cash flow generated in a single quarter. Non-GAAP subscription gross margin held at 81.5%. These are not numbers that suggest a business under pricing pressure. They’re numbers that suggest a business that hasn’t found its ceiling yet.
Current RPO — the contracted revenue expected to be recognized over the next 12 months — came in at $12.64 billion, up 22.5% year-over-year. Total RPO stood at $27.7 billion, up 25%. cRPO has now grown above 20% for five consecutive quarters. What’s interesting is that this metric matters more than the headline revenue number for forward-looking institutional positioning — it’s contracted, not projected, and it compounds. Full-year 2025 total revenue was $13.28 billion, up nearly 21% from $10.98 billion in 2024, with earnings reaching $1.75 billion. The compounding has been remarkably consistent.
Slight tangent, but bear with me: the company’s internal AI deployment data is worth mentioning not because it’s a selling point, but because it informs how seriously management is actually treating the product. ServiceNow generated an estimated $500 million in annualized AI-driven internal value in 2025 — including $100 million in OpEx savings — and is projecting another $200 million in incremental savings for 2026. When a company is deploying its own AI infrastructure at that scale, it’s not just pitching customers. It’s iterating in production.
Now Assist — the company’s AI product suite — had customers spending over $1 million in annual contract value grow more than 130% year-over-year in Q1 2026. The company raised its full-year 2026 AI ACV target to $1.5 billion, up from the original $1 billion target, confirmed on the Q1 earnings call and reiterated at Financial Analyst Day on May 5. At Knowledge 2026 in Las Vegas last week, ServiceNow unveiled Now Otto — a unified AI experience integrating conversational AI, autonomous workflows, enterprise search, and voice agents — and expanded its AI Control Tower for multi-cloud AI governance. The $30 billion subscription revenue target for 2030 was also reaffirmed, with management calling it a conservative projection. Roughly 30% of annual contract value is expected to come from Now Assist by that point.
Whether the flywheel sustains is the right question. What Q1 showed is that it’s still accelerating.
On the customer side: 630 customers carried more than $5 million in annual contract value at the end of Q1, up approximately 22% year-over-year. The company recorded 16 transactions with more than $5 million in net new ACV in the quarter — roughly 80% year-over-year growth in that cohort. Renewal rate holds at approximately 98%. That figure doesn’t just mean customers like the product. It means the switching cost is real. Replacing ServiceNow isn’t a software swap — it’s an organizational restructuring that most large enterprises simply won’t do. That’s not marketing language. That’s the actual moat.
Back to the analyst picture. Bernstein raised its price target to $236 from $226 on May 6, following Analyst Day, citing the company’s 2030 targets: Rule of 40 above 60, free cash flow margin expansion of roughly 900 basis points versus 2025 levels, and a commitment to reduce stock-based compensation below 10% of revenue by 2029. Across 31 analysts currently covering NOW, the consensus is Strong Buy with an average 12-month price target of $184.13 — nearly 70% above where the stock was trading coming into this week. Not every analyst is at $236. But none of them are modeling failure either.
The 52-week range is $81.24 to $211.48. Today’s session is deep in the lower half of that range.
Here’s where I’m at on the technical side. VWAP hold on any intraday pullback is the first thing to watch — a gap of this size that can’t hold above VWAP by midday is a different conversation than one that consolidates above it. The 20-day and 50-day moving averages are the relevant reference points for whether today is one session or the start of a sustained move. Volume confirmation on the close matters more than the morning open. That much hasn’t changed.
Three things to hold in tension when thinking about risk.
- Upside path: AI ACV tracking toward $1.5 billion, cRPO holding above 20% growth in Q2 2026, and the broader software sector stabilizing after a brutal first half. Bernstein’s $236 target and the 31-analyst consensus at $184.13 frame the recovery range if fundamentals stay intact.
- Middle path: The stock holds a portion of today’s gains and consolidates. Full-year 2026 subscription guidance of $15.735–$15.775 billion and Q2 subscription guidance of $3.815–$3.820 billion provide the next fundamental checkpoints. Macro sentiment drives price action more than company-specific data in this scenario.
- Downside path: Q1 2026 already absorbed a 75 basis point drag on subscription revenue from delayed on-premise deal closings tied to Middle East conflict. Margin pressure from the Armis acquisition integration is expected to persist through 2026, with normalization not projected until 2027. If Q2 cRPO guidance disappoints, that’s the signal worth respecting.
Intraday volatility is likely to remain elevated. Position sizing matters more than directional conviction in sessions like this. The options market is already pricing an expanded near-term range — that’s information about expected movement, not just sentiment.
For those already long: a trailing stop below VWAP or a defined intraday pivot is basic risk discipline given today’s magnitude. For those on the sidelines evaluating a new position: entering at the session high after a 5.9% gap is a different risk profile than waiting for a pullback toward a reclaimed moving average. Both are valid frameworks. They just have different math.
What I keep coming back to is the contrast between the fundamental picture and where the stock has been trading. $27.7 billion in contracted obligations, five consecutive quarters above 20% cRPO growth, 98% renewal rates, $1.67 billion in free cash flow in a single quarter — and the stock was sitting at $95 last Friday. The BofA reinstatement didn’t create new information. It reframed existing information for a market that had been pricing in the bear case.
Whether today holds or fades, the Q2 earnings call is going to matter a lot more than this session. That’s the next real data point.
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