Hedgeye adds ServiceNow stock to its list of ‘short ideas’

ServiceNow Inc (NYSE: NOW) is in focus on Wednesday after Hedgeye issued a short call on shares of the IT management company based out of Santa Clara, California.

ServiceNow stock could tank 30%

The independent investment research firm is concerned that the extent to which the remaining addressable market of ServiceNow will become a reality by the end of this year may be limited.

On Wednesday, Hedgeye analyst Andrew Freedman warned of a 30% downside in $NOW and said:

ServiceNow is scheduled to report its quarterly results on January 24^th. Consensus is for it to earn $1.10 a share versus 88 cents per share a year ago.

Why else is Hedgeye dovish on $NOW

Freedman dubbed ServiceNow a new short idea today also because incremental features in its Vancouver release failed to deliver efficiency gains that investors expected out of Gen AI.

Short interest in $NOW currently sits at 1.43% only. Also on Wednesday, Bill McDermott – the chief executive of ServiceNow said “it’s unbelievable how [AI] generates productivity”.

He made the remark in his interview with CNBC at the World Economic Forum in Davos. Wall Street currently has a consensus “buy” rating on the tech company.