Key Highlights

  • ServiceNow (NYSE: NOW) surged nearly 40% across four sessions following NVIDIA CEO Jensen Huang's Computex keynote endorsing enterprise software as a direct beneficiary of agentic AI, before pulling back sharply on profit-taking.
  • The GraniteShares 2X Long NOW Daily ETF is designed to deliver twice ServiceNow's daily price return, amplifying both the upside of any resumed rally and the downside of continued consolidation.
  • Wall Street maintains a Moderate Buy consensus on NOW with an average price target of approximately $1,418.50, suggesting analysts remain constructive despite the elevated valuation after such a rapid recovery.
  • Today's selloff appears driven by profit-taking rather than fundamental deterioration, with broader tech showing mixed signals as Oracle and Google both decline even as the S&Amp;P 500 and XLK hover near 52-week highs.
  • Like all daily leveraged ETFs, this product is subject to Volatility decay and daily Rebalancing, making it a short-term trading instrument suited only for traders with a clear directional view and disciplined risk management.

There are rallies, and then there are the kind that stop experienced market observers in their tracks. A nearly 40% gain across four trading sessions in a large-cap enterprise software company is the latter. ServiceNow's move following Jensen Huang's Computex keynote was not a speculative spike in a thinly traded small-cap. It was a violent and rapid repricing of one of the world's most important enterprise technology platforms by institutional investors who had spent the better part of two years worrying that AI would destroy the software Business rather than supercharge it.

Today's pullback, sharp as it appears, is the natural exhale after that kind of move. The question for traders is what comes next, and whether the GraniteShares 2X Long NOW Daily ETF offers a sensible vehicle for expressing a view on that question.

What Drove the Historic Four-Session Rally

To understand today's selloff, it helps to understand precisely what caused the rally that preceded it.

For much of the past two years, enterprise software stocks operated under the shadow of what technology circles called the SaaSpocalypse. The fear was straightforward. If artificial intelligence could automate coding, workflow management, customer support, and enterprise tasks at scale, perhaps the software platforms charging annual subscription fees for those same capabilities would become obsolete. Valuations compressed. Institutional investors reduced exposure. The narrative turned decisively negative.

Jensen Huang's Computex keynote broke that narrative in a single afternoon. By describing AI as a once-in-a-lifetime opportunity for software companies rather than an existential threat, Huang effectively gave institutional investors permission to revisit positions they had been underweighting. ServiceNow, with its dominant enterprise workflow automation platform sitting precisely at the intersection of AI deployment, digital transformation, and operational efficiency, was the most obvious beneficiary of that reassessment.

The resulting four-session move was not irrational exuberance. It was the rapid unwinding of a bearish consensus that had kept institutional ownership below where Fundamental Analysis would otherwise have placed it. Norges Bank's approximately $2 billion position and broader institutional accumulation reflect a recognition that AI is expanding the software market rather than cannibalising it. ServiceNow's platform, which helps large organisations integrate data, govern AI deployments, and manage workflows across IT, HR, and Customer Service functions, becomes more valuable as AI adoption accelerates, not less.

Why Today's Pullback Does Not Change the Thesis

Profit-taking after a 40% four-session run is not a signal. It is arithmetic. Investors who bought ServiceNow at April lows and held through the rally have substantial unrealised gains and entirely rational incentives to lock in some of those profits. The fact that Oracle and Google are also declining today, while the S&P 500 and XLK remain near 52-week highs, suggests the selling pressure is sector-specific and rotational rather than a fundamental reassessment of the AI software opportunity.

The analyst community's continued constructive stance reinforces that reading. A Moderate Buy consensus with an average price target of approximately $1,418.50 is not the language of a Wall Street community that believes today's decline represents a change in the fundamental story. The caution analysts have expressed relates to valuation, specifically the speed with which NOW recovered from its April lows, rather than any deterioration in the underlying business or competitive position.

ServiceNow enters this consolidation period with its core Investment case intact. The platform's switching costs remain high. Its integrations across enterprise systems deepen customer dependency over time. Its AI capabilities, embedded into existing workflows through generative automation tools, create new monetisation opportunities on top of a subscription base that was already growing steadily. None of that changed this week.

What the GraniteShares 2X Long NOW ETF Actually Does

The GraniteShares 2X Long NOW Daily ETF is engineered to deliver approximately twice ServiceNow's daily price return. On a day when NOW gains 3%, the ETF targets a return of approximately 6%. On a day when NOW falls 3%, the ETF targets a loss of approximately 6%. That relationship holds cleanly for a single Trading session.

Beyond one day, the daily rebalancing mechanic introduces compounding effects that separate this product's performance from a simple doubling of ServiceNow's multi-day return. In a market where NOW trends consistently upward with low day-to-day volatility, the compounding works in the holder's favour. In a choppy market where the stock oscillates without a clear directional trend, volatility decay erodes returns regardless of where the stock ultimately ends the period. This is not a product flaw. It is a mathematical certainty embedded in daily leveraged structures that every prospective holder must understand before committing Capital.

The current environment, a sharp pullback following an extraordinary rally, is precisely the kind of volatile, directionless condition where volatility decay is most costly. Traders considering the leveraged ETF today are not buying into a clean uptrend. They are making a specific bet that the consolidation is brief and that ServiceNow resumes its upward trajectory in the near term.

The Case For Considering the Leveraged ETF

The bull case rests on the durability of the fundamental rerating that Huang's keynote accelerated. If the institutional reassessment of enterprise software as an AI beneficiary rather than an AI victim is genuine and ongoing, ServiceNow's fundamental Earnings power justifies prices well above where the stock traded before the rally. A resumption of the uptrend from current consolidation levels would reward leveraged long holders at twice the rate of direct stock ownership.

The broader software sector context is supportive. The iShares Expanded Tech-Software Sector ETF recently recorded its strongest monthly performance since 2001. Snowflake (NYSE: SNOW), Okta (Nasdaq: OKTA), and Salesforce (NYSE: CRM) have all delivered results confirming that AI-related Demand remains robust across enterprise platforms. If ServiceNow's next earnings print confirms the same pattern, the stock has a clear catalyst for the next leg higher.

Enterprise spending patterns also provide comfort. Large organisations are not reducing software budgets as AI adoption increases. They are expanding them, adding AI-specific tools and platform upgrades on top of existing commitments. ServiceNow, positioned at the orchestration layer of enterprise AI deployment, captures a share of every dollar spent modernising workflows and integrating AI into business operations.

The Risks That Require Respect

Today's decline is a reminder of how quickly gains can evaporate in a high-momentum name after a compressed rally. The leveraged ETF amplifies that dynamic to an uncomfortable degree in the short term. A sustained correction in NOW of 15 to 20%, which would be entirely ordinary following a 40% four-session gain, translates to a 30 to 40% loss in the leveraged product over the same period.

Valuation remains a genuine concern. ServiceNow trades at a premium multiple that reflects significant future growth expectations embedded by the post-Computex rally. If AI monetisation timelines extend beyond current expectations, or if enterprise spending moderates due to macroeconomic pressure, the stock's valuation provides limited cushion against disappointment.

Competition across enterprise software markets is intensifying. Microsoft (NASDAQ: MSFT), Salesforce, and a growing number of AI-native startups are all competing for the same enterprise workflow and automation budgets that ServiceNow has historically dominated. Maintaining product differentiation in this environment requires continuous and expensive innovation.

Who This ETF Is and Is Not For

The GraniteShares 2X Long NOW Daily ETF is appropriate for traders who have a specific, near-term bullish view on ServiceNow, understand daily rebalancing and volatility decay, have defined their maximum acceptable loss before entering, and are prepared to monitor the position actively and exit promptly when the thesis changes.

It is not appropriate for long-term investors who believe in ServiceNow's multi-year AI enterprise story and want sustained exposure to that theme. For those investors, direct ownership of NOW shares is the correct vehicle. The daily rebalancing structure of the leveraged ETF will work against a long-term holder through any period of normal volatility, producing results that bear little resemblance to twice the stock's long-term return.

The distinction is especially important today, when a sharp pullback after an historic rally creates exactly the kind of emotional environment in which investors who should not be using leveraged ETFs are most tempted to reach for them.