Key insights
- An investor is facing losses on a 2x leveraged ServiceNow position after a 16% drop post-Q1 earnings. While the investor acknowledges ServiceNow's strengths (recurring revenue, enterprise leadership, AI potential), concerns about high valuation, leverage decay, and market volatility are prompting a decision to hold or sell. The situation highlights the risks of leveraged ETFs, especially with growth stocks facing valuation scrutiny and potential for further market corrections.
I bought a 2x leveraged position in ServiceNow and after the Q1 results the stock dropped around 16%, so I’m currently in a loss.
From what I understand, the company still has strong revenue growth, solid enterprise demand, and good AI-related optimism long term. But I’m worried about the risks of holding a leveraged position since daily resets can hurt badly during volatility.
What I like:
- Strong recurring subscription business * Enterprise software leader * AI integration narrative still strong
What concerns me:
- High valuation * 2x leverage decay during volatile periods * Market reaction after earnings
Would you hold through the volatility or cut the loss and move on? Interested in hearing both bullish and bearish views.
Thank you!