Dear readers,
On Thursday we wrote that the market was sorting companies into two bins — ad-tech giants printing 50%-plus margins and physical-world builders warning of cash burn. The sorting has continued, but a third bin is demanding attention: the enterprise software layer, where companies are quietly dismantling their own business models to make room for AI agents.
How does a software giant post 22% revenue growth, secure a massive artificial intelligence footprint, and still watch its stock collapse 19% in a single week? That question tells you everything about where the market’s head is right now — and where the next opportunity sits.
The S&P 500 closed Friday at a record 7,165, the Nasdaq pushed past 24,800, and Nvidia crossed the $5 trillion market-cap threshold. Intel surged 23.6% on stellar Q1 earnings. The hardware celebration is in full swing. We’re looking somewhere else entirely.
The ServiceNow Paradox and the Death of “Per-Seat” Pricing
ServiceNow (NOW) delivered 22.1% revenue growth in Q1. The stock dropped nearly 19%. Wall Street zeroed in on softer gross margin forecasts and the financial weight of its $7.75 billion acquisition of cybersecurity firm Armis.
Fair enough. But buried in the quarter was a data point that every software investor should circle in red: 50% of ServiceNow’s new business came from non-seat-based pricing models.
For a decade, the entire SaaS industry ran on per-seat licensing. AI agents don’t occupy seats. They deliver outcomes. ServiceNow’s AI annual contract value is on track to exceed $1.5 billion, and the company is effectively building the post-seat software economy in real time. Thursday we noted BMO Capital’s downgrade on disappointing organic growth. The market’s punishment has been swift. But the investors willing to look past near-term acquisition drag and recognize a fundamental business-model overhaul may find themselves staring at one of the better entry points of the year.
Building the Enterprise Control Plane
The race is no longer about who builds the best AI model. It’s about who hosts the autonomous agents that do the actual work.
Snowflake (SNOW) just launched a major platform upgrade — Snowflake Intelligence and Cortex Code — designed explicitly to become the control plane for enterprise AI agents. The company is integrating deeply with external data services including AWS Glue and Databricks to consolidate AI workloads onto its infrastructure. More than 9,100 customers are already using Snowflake’s AI products on a weekly basis. The strategy is clear: when autonomous agents act, Snowflake wants them acting on its rails.
Curing App Fatigue
Salesforce and Google Cloud announced a sweeping partnership on Friday to embed AI agents directly into Slack and Google Workspace.
The problem they’re attacking is mundane but enormous. According to Salesforce’s Srini Tallapragada, the average knowledge worker loses roughly two hours of productivity every day toggling between applications. By deploying Agentforce and Gemini Enterprise inside Slack, sales teams can now prep briefings, query BigQuery databases, and track deals without switching tabs. The next phase of enterprise AI isn’t about novelty. It’s about ruthless workflow consolidation — collapsing fifteen clicks into one prompt.
The Capex Reckoning Arrives Wednesday
On Thursday we flagged Meta’s $115–$135 billion capex guidance and the question of whether those dollars translate into durable margins. Next week we get the answers.
Microsoft and Meta report on Wednesday, April 29. Apple follows on Thursday. Wall Street expects Microsoft’s Azure to post 28% year-over-year growth, but the real test is whether Meta’s infrastructure spending — which funded Reality Labs losses of $6.02 billion in Q4 2025 alone — is generating returns at the application layer, not just inside the ad auction. The market has cheerfully funded the hardware build-out. Now it wants software margins to justify the bill.
The Macro Backdrop: Warsh Cleared, Oil Still Hot
The S&P’s record highs come with Brent crude hovering above $105 a barrel amid the ongoing Strait of Hormuz blockade. US envoys Jared Kushner and Steve Witkoff are arriving in Islamabad this weekend for talks with Iranian officials — the latest attempt at a diplomatic breakthrough.
In Washington, the DOJ formally dropped its investigation into Fed Chair Jerome Powell on Friday, clearing the path for Donald Trump’s nominee, Kevin Warsh, to assume the Fed chairmanship when Powell’s term ends May 15. With the oil shock pushing US inflation to 3.3% in March, Warsh’s historically hawkish posture suggests the aggressive rate cuts Wall Street is pricing may not arrive until well into 2027.
The Takeaway
The hardware makers have pulled forward years of growth and are priced accordingly. The ad-tech giants — as we detailed Thursday — are converting AI capex into 50%-plus margins with remarkable efficiency. But the third layer, enterprise software, is where the business-model transformation is most dramatic and least appreciated. The companies successfully abandoning per-seat pricing for outcome-based models are building the monetization infrastructure for every autonomous agent in every enterprise on earth. That is where the next trillion dollars in market value gets created.
Enjoy the rest of your weekend.
Best regards,
The StocksToday.com Editorial
