ServiceNow in Deep Waters as CEO Confirms Tech Firm Not Able to Compete with Strong Dollar

Key points ServiceNow stocks:

  • It appears that macro headwinds along with the strong dollar are proving to be the kryptonite for tech companies worldwide according to Service Now CEO Bill McDermott. 
  • According to McDermott, it is highly unlikely that tech companies will outpace the dollar at the moment.
  • Since his comments, ServiceNow shares plummeted by 12%.

According to ServiceNow CEO Bill McDermott, the avalanche caused by macro headwinds and the strong dollar is too strong a force for global tech companies. McDermott made these remarks in an interview with CNBC’s Jim Cramer. 

He said that we are witnessing 41-year high inflation and the dollar is at its highest point in more than 20 years. He also added that due to the surging interest rates and the ongoing war in Ukraine, market conditions are not very ripe for tech players. The interview aired on “Mad Money” post the closing bell on Monday. 

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ServiceNow turmoil

ServiceNow enables companies to digitize their workflow. Recently, the company has widened its core business offerings by adding human resources and customer service management. 

 However, the company’s shares have fallen by 12% after McDermott’s comments. McDermott’s views are based on general industry observations and not specific to ServiceNow. ServiceNow has treaded through a quiet period ahead of reporting its earnings from the last quarter on July 27. 

High inflation rates, shutdowns in China due to the pandemic, and the geopolitical situation in Europe have put a severe dent in tech stocks. A bunch of tech-heavyweights are expected to reveal their earnings in the last quarter next month, setting the tone for the overall industry. 

Despite odds racking up against the tech world, McDermott says that the tech companies will play a key role in aiding the U.S. economy and getting it through the topsy-turvy market environment. He says that if you consider energy, the dislocation due to the war in Europe had led to longer cycles. However, this does not change the fact that tech will remain instrumental in getting past these headwinds. 

McDermott is referring to reprioritization wherein a surge in demand for fast-return-on investment is on the cards. 

Time will tell if the tech industry can successfully navigate through these hostile conditions and gain a strong foothold again. Meanwhile, let us know what is your take on the dwindling ServiceNow stock prices? Will the company’s stocks see daylight again?

SEE ALSO: Japanese Firm Fujitsu to Invest £22 million in UK’s Tech Ecosystem

Karandeep V

Karandeep V

Karandeep was born in Pune, Maharashtra, an upcoming metropolitan city in the Western region of India. While most members of his family are engineers, he had different ideas. He was more inclined toward exploring the non-technical aspects of a business, which is why he studied Bachelors of Business Administration at Symbiosis International University, Pune.  Having said that, his love for new and upcoming technologies remained intact, which is why he has written extensively about technology throughout his career. After a brief stint with a gaming company at the beginning of his career, he discovered that his love for writing was not temporary.  Being a tech geek, he always liked installing and playing around with new applications on his mobile devices and the home desktop. He was fascinated by how technology can simplify even the most mundane and complex tasks with just a few commands. He keeps a close eye on how businesses use different tools to streamline their operations to boost productivity and efficiency. At ToolsMetric, he writes product reviews that cover the main features and specifications of different enterprise applications. The sheer amount of innovation and hard work that goes into building these tech solutions is one of the reasons why Karandeep loves reviewing these tools. Besides product reviews, he also writes interesting news articles and blogs that track the latest developments in the tech industry.  When he is not writing, you can find him rooted to his seat playing video games, watching movies, or supporting his favorite football team. Since his childhood, he has always loved to travel and explore new places. Traveling is a major part of his life due to a myriad of reasons such as experiencing new cultures, food, and traditions. His other hobbies include playing football, cooking, and running.  You can find him on LinkedIn here.

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