We're Buying More of This Software Holding as We Dial Back Our Hedging Positions
Falling near-term tariff uncertainty allows us to be opportunistic.
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| Symbol | Transaction Type | # Shares Traded | Recent Price $ | Shares Owned After Trade | % Portfolio |
|---|---|---|---|---|---|
SH | Sell | 580 | 41.05 | 1,250 | 1.0 |
PSQ | Sell | 630 | 35.80 | 1,430 | 1.0 |
NOW | Buy | 27 | 975 | 172 | 3.25 |
After you receive this Alert, we will make the following trades:
-- Sell 580 shares of the ProShares Short S&P500 ETF SH at or near $41.05. Following the trade, SH shares will account for roughly 1.0% of the portfolio.
-- Sell 630 shares of the ProShares Short QQQ ETF PSQ at or near $35.80. Following the trade, PSQ shares will account for roughly 1.0% of the portfolio.
-- Buy 27 shares of ServiceNow NOW at or near $975. Following the trade, NOW shares will account for roughly 3.25% of the portfolio.
Building on our comments yesterday about the postponed Trump tariff threat and the market resetting rate-cut timing expectations to be more in line with our thinking, we are taking off some of the portfolio’s market hedging positions. When we added them a few weeks back, we said our use would be purely tactical in nature and we would unwind them as known unknowns became less of an overhang on the market. We’re starting to do that and barring any new unknowns that could throttle the market we expect more of the same in the coming days. That said, as we approach the start of Trump’s April 1 tariff data, should the prospect for further tariffs emerge, we may be inclined to call these ETFs back into the portfolio.
We will take a portion of the returned capital from those trades and redeploy it by adding to the portfolio’s position in ServiceNow NOW. While we hesitate to say the shares are on sale, the current price is nicely below where we picked up shares in December and January.
At the same time, it is clear we are still in the early stages of enterprise AI adoption and those efforts are expected to rise over the next three years. In our more recent batch of Saturday Signals, we shared the findings from a late January report from McKinsey that:
Over the next three years, 92 percent of companies plan to increase their AI investments. But while nearly all companies are investing in AI, only 1 percent of leaders call their companies “mature” on the deployment spectrum, meaning that AI is fully integrated into workflows and drives substantial business outcomes.
As Microsoft MSFT, Amazon AMZN, Meta META, and Alphabet GOOGL address their current AI and cloud capacity constraints, we should see revenues at ServiceNow benefit as well.
That combination is leading us to take advantage of the pullback in NOW. Should we see that continue and the shares land in oversold status, we would look to pick even more for the portfolio. That would also be an opportune time for us to revisit our current Two rating.
(Please note that we are looking to execute these trades at or near the share price mentioned above. Once the trade is completed, subscribers can see the trade's executed price here. Be sure to toggle the chart to sort by Purchase Date.)
At the time of publication, TheStreet Pro Portfolio was long SH, PSQ, NOW, MSFT, AMZN, META and GOOGL.
