Claude AI closed out its positions in ServiceNow and Inter & Co after reaching profit targets and identifying valuation or credit risks.
While ServiceNow's core business remains strong—subscription revenue grew 25% year over year and its AI product hit $1 billion in annual contract value—the stock's 30x forward earnings multiple leaves little upside relative to 20% consensus growth.
Inter & Co, a Brazilian digital bank, deteriorated on rising cost of risk and a shrinking loan-loss cushion despite headline earnings strength, compounded by currency weakness and political uncertainty in Brazil.
What happened
Claude AI sold its entire ServiceNow position after a 40% gain, citing valuation concerns—the stock's twelve-month base case of $122 meant the position would earn less than cash. Claude also exited Inter & Co (NASDAQ:INTR), a Brazilian digital bank that was down about 40% for the year.
Why it matters
ServiceNow's growth remains solid—Q2 subscription revenue grew 25% year over year and its Now Assist AI product hit $1 billion in annual contract value six months ahead of schedule—but the stock trades near 30x forward earnings while consensus growth sits around 20%, leaving little room for multiple expansion. For Inter & Co, rising cost of risk (5.9%) and a shrinking loan-loss coverage cushion (146% to 134%) signal deteriorating credit conditions despite record net income; Brazil's currency weakness and political uncertainty (an upcoming election) added to the exit case.
What to watch
ServiceNow faces long-term pressure from AI-native startups as AI gets cheaper and smarter, which may act as a valuation ceiling. Inter & Co trades at 5.5x 2027 consensus earnings and 1.3x book value, but credit metrics and macro headwinds will determine whether the selloff creates a buying opportunity or signals deeper problems ahead.
Claude AI's exits reflect disciplined portfolio management around valuation and risk rather than fundamental business deterioration. ServiceNow exemplifies the valuation trap: the company's AI product (Now Assist) is accelerating faster than expected—hitting $1 billion in annual contract value six months ahead of schedule and driving customers running agentic AI in production to grow ninefold over nine months—yet the stock's 30x forward earnings multiple offers little cushion for growth expectations of 20%. The tension between solid operational performance and stretched valuation is real, especially given emerging competition from AI-native startups and potential pressure on ServiceNow's seat-based pricing model as AI commoditizes.
Inter & Co's exit tells a different story: deteriorating credit metrics (rising cost of risk, shrinking loan-loss coverage) despite record net income revealed hidden stress in the loan book, compounded by macro headwinds specific to Brazil. The real's currency depreciation and political uncertainty (an election ahead) tipped the risk-reward equation. Claude's willingness to cut losses on Inter despite some bullish signals—1.3x book value valuation, 15% customer growth, 21% payment volume growth, and a secured-heavy loan book—suggests confidence that macro and credit risks outweigh near-term upside.
AI-summarized, only the topics you pick — one digest a day via Email, Slack, or Discord.
Free · takes 30 seconds · unsubscribe anytime
Ask AI anything about this article. Q&As are published on this page for other readers too.
Marvell Technology's stock rose around 5 percent, driven by social media discussion of its optical networking…
Three semiconductor equipment suppliers—Onto Innovation (US$1.1b revenue, US$15.7b market value), KLA (US$13.6…
IBM and OpenAI announced a strategic partnership on August 13, 2026, embedding OpenAI frontier models like GPT…
Micron's third-quarter fiscal 2026 revenues jumped 346% year over year to $41.46 billion, driven by strong dat…
GE Vernova (NYSE:GEV), a power infrastructure company spun off from General Electric, is being highlighted as…
Wells Fargo identified commercial real estate (CRE) as a beneficiary of what it calls "unrelenting demand for…
The AI news that matters, in one minute each morning.
Sign up free