Title: Haymaker Portfolio Update — ServiceNow (NOW) / Alibaba (BABA)
Show: Haymaker (Substack) — Portfolio Update
Guest: David Hay / The Haymaker Team
Date: 2026-06-01 (PAID)
URL: https://haymaker.substack.com/p/haymaker-portfolio-update
Length: written post (no timestamps)
Note: Summary of the paid Portfolio Update; key figures and theses preserved. No audio/timestamps.

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ServiceNow (NOW). We bought NOW at $102 on April 2 as "one of the most ridiculously mispriced stocks." It then gapped to a 52-week low of ~$83 on April 10, pricing in the worst case of three concerns — AI disruption to the SaaS workflow model, margin headwinds from the Armis acquisition, and Middle-East deal delays — at about 5.6x forward NTM revenue. The stock is now ~$135, up roughly 30% in two months.

Q1 2026 (reported April 22): subscription revenue $3.671B (+22%), free cash flow $1.665B (+13%), remaining performance obligations $27.7B (+25%), and a raised outlook. There were 16 deals greater than $5M net-new ACV (+~80% YoY), and Now Assist $1M+ ACV customers grew +130% YoY. The stock jumped 14.56% on the print.

At Knowledge 2026 in May, ServiceNow launched AI Control Tower — the governance and accountability layer for enterprise AI agents ("who is responsible when an agent does something wrong?") — and Otto, a conversational AI interface. Security and risk offerings crossed $1B ACV (Armis + Veza); AWS Marketplace sales topped $1B; and the company announced Experian Ascend and Boomi partnerships. The business produces $4.6B of annual FCF, 98% renewal rates, and $27.7B of contracted revenue. Catalysts ahead: a 6.5x consumption-conversion opportunity, Now Assist scaling toward $2B+, and autonomous-workforce deployments. Q2 earnings are July 21.

This is a ~30% return in two months on a thesis that is playing out — the AI Control Tower as the enterprise-AI governance layer, Now Assist scaling. But after a 65% rally off the bottom, some gain-harvesting may be in order, though the stock is more likely higher in six months if you can hold.

Alibaba (BABA). BABA is down ~25% from our bullish call — we described it as "China's Amazon and Google rolled into one." Its bottom line is poor because of heavy AI investment (growing >100%), food-delivery losses, and an internal chip division (reducing reliance on Western and Korean semiconductors). It sits in the "penalty box" until it shows the capital outlays can generate returns. ("Heaven forbid if the Big Four US hyperscalers were held to this standard!") It trades cheaply, particularly on price/sales — we suggest gradual dollar-cost-averaging into this "world-class company."