u/chrispalumbo — reddlx

ServiceNow beat on nearly every line last night and is down 1.3% today. The disconnect is worth understanding.

Original Post with Charts and Widgets: https://readplaza.com/s/e5f0ac0e71

Start with the beat itself. Subscription revenue came in at $3.877 billion, 23% constant-currency growth, 150 basis points above guidance. Operating margin at 29.5%, three points above what they guided. AI ACV crossed $1 billion, up more than 40% quarter-over-quarter. On the surface, this is a clean quarter.

The reason the stock is soft is what CFO Gina Mastantuono flagged before any analyst could ask about it. Roughly half the Q2 revenue beat came from U.S. federal on-premise revenue pulled forward from Q3. Strip that timing shift out and the organic beat is closer to half the headline number. That's why the full-year guidance only went up $15 million on a $150 million-plus outperformance.

What the market may be missing is the backlog. The contracted revenue ServiceNow expects to recognize over the next 12 months (cRPO) came in at $13.2 billion, up 21.5%, beating guidance by 200 basis points. ServiceNow added more new contracts in Q2 than analysts expected. Q3 has more to draw from than the guidance raise implies.

Then there's the GAAP line. Reported EPS came in at $0.29, missing estimates by 9%, down 35% sequentially. Moveworks, Veza, and Armis are all integrating simultaneously, and those costs are landing in the P&L before the revenue from those acquisitions has fully shown up. That's a temporary drag, not a structural problem, but it's ugly on paper.

The AI thesis is on track. $1 billion in AI ACV with $1.5 billion in the crosshairs by year-end. The market is repricing a quarter that looked cleaner than it was once you pull the timing out. This could take a few weeks to digest. Very bullish on $NOW.

readplaza.com

u/chrispalumbo — 2 days ago

▲ 2 r/ValueInvesting

Is Planet Fitness cheap for a reason?

Is the market undervaluing $PLNT at ~$52 and a ~$4.1B market cap, or is the stock cheap for a reason? Their revenue and operating margin is growing YoY. 2025 Revenue: $1.3B, Operating Margin: 30%. They have $3.1B in total assets, with almost $500M cash.

readplaza.com

u/chrispalumbo — 2 months ago

▲ 7 r/ValueInvesting+1 crossposts

Many bullish SK Hynix on the HBM trade. The cleanest US-listed proxy ($EWY) rarely gets mentioned.

Been seeing SK Hynix in every DRAM thread lately. Solid thesis. Nobody is discussing the cleanest US-listed way to play it.

$EWY (iShares MSCI South Korea ETF). SK Hynix and Samsung combined are roughly 49% of the fund. Over the past year they contributed 84 percentage points of EWY's ~140% gain. That's about 60% of the total return concentrated in two stocks.

With EWY you get exposure to the two memory players inside every Blackwell GPU, without needing Interactive Brokers or a Korean broker.

I wrote my Original Thesis almost a month ago, and it's up 43% since.

The setup

Every Blackwell GPU runs on HBM3e. SK Hynix has around 60% of global HBM share. They locked in two-thirds of Nvidia's HBM4 orders for Vera Rubin, the next GPU generation. On the Q3 2025 call in October, their head of DRAM marketing said 2026 capacity was sold out. They then raised HBM3E prices 20% for 2026 deliveries.

At GTC in March, Jensen upgraded the Blackwell + Rubin order pipeline from $500B through 2026 to $1 trillion through 2027. Every chip in it has SK Hynix memory.

The numbers

FY2025: KRW 97.1T revenue (US$66.4B). Operating profit up 101% to KRW 47.2T (US$32.3B). Net profit KRW 42.95T (US$29.4B), larger than their entire 2023 revenue. Q4 operating margins hit 58%.

Q1 2026 alone produced KRW 37.6T in operating profit (US$25.7B) at a 72% margin. One quarter was 80% of the full FY2025 operating profit. At Q1 run-rate, annualized 2026 revenue would more than double FY2025.

Each GPU generation demands more HBM per chip. Blackwell B200: 192GB. Vera Rubin: 288GB. Demand curve compounds as AI scales.

The honest risks

Vera Rubin delays. Reports in April said SK Hynix may cut HBM4 shipments 20-30% from original targets due to Rubin rollout delays. Rubin's share of Nvidia's high-end GPU shipments now expected to slip from 29% to 22% in 2026. HBM3E demand is offsetting it for now, but the bull case assumes a clean Rubin transition.

Samsung. Targeting 30%+ of Nvidia's HBM4 orders in 2026 after slipping to third in HBM in Q2 2025. More important, recent reports indicate Samsung achieved pricing parity with SK Hynix on HBM4. The HBM3E pricing premium SK Hynix enjoyed isn't carrying into HBM4. If Samsung's yield holds, pricing power compresses.

This is actually why EWY is interesting. Samsung is the second largest holding. Even if SK Hynix loses HBM4 share to Samsung, i hedged.

Not financial advice. Curious if anyone's playing the Korean memory exposure differently.

u/chrispalumbo — 3 months ago

▲ 3 r/tradingDeck1

Been spending a lot of time looking into photonics lately. Everyone focuses on the end vision, replacing electrical data movement with light, but if that actually plays out over the next 10-20 years, there’s an entire upstream infrastructure layer that benefits first.

That’s what led me to Veeco.

They make equipment used in advanced semiconductor manufacturing, photonics, compound semis, etc. Felt like one of those picks-and-shovels angles where you don’t need to perfectly predict the final winners to still potentially win from the buildout itself.

I posted the thesis here a few days ago before the move:
https://readplaza.com/posts/photonics-might-take-20-years-so-i-looked-upstream-instead

Stock ripped 30% today after announcing a new deal.

I’m also building Plaza, which is basically a place to post investment theses/research where the outcomes get tracked over time so your ideas build a public record instead of disappearing into feeds.

u/chrispalumbo — 3 months ago