Business
from24/7 Wall St.
4 hours agoServiceNow vs Shopify: Which Is the Better Short Candidate Right Now?
Shopify presents a more compelling short thesis due to its high valuation and unreliable earnings quality compared to ServiceNow.
The GMO U.S. Quality ETF ( NASDAQ:QLTY) has attracted $3 billion since launching in November 2023 by focusing on companies with exceptional returns on capital. That strategy delivered 20.5% returns over the past year by concentrating on profitable technology leaders like Microsoft ( NASDAQ:MSFT) and Meta Platforms ( NASDAQ:META), outpacing the S&P 500 ( NYSEARCA:SPY) by roughly 500 basis points. Yet Reddit investors increasingly debate whether valuations have stretched too far entering 2026.
Yesterday we highlighted Oracle's massive $455 billion cloud backlog and the question of whether infrastructure spending would finally convert to sustainable margin expansion. This morning, investors are answering decisively. Shares plunged 12% to around $197 in Thursday trading after the company reported a 38.6% earnings beat that came with a $2.7 billion one-time gain, weak guidance, and a stunning $15 billion increase to capital expenditure forecasts.