after year after year. Okay, now it's time to get into the broader market situation. Seen a lot of highs being hit lately, and a lot of people are like, you know, Charlie, the market's at alltime highs again. Isn't it too expensive? Shouldn't I wait for a crash? History can give us a really good guide here. So, since 1950, the S& P 500 has closed at all-time highs roughly 7% of all trading days. If the market hits a new high about 7% of the time, that's roughly one new high out of every 14 trading sessions on average. That's one every 2 to 3 weeks over a 75- year period. If you look at the decadeby decade pattern, the 1980s, a strong bullrunn decade, printed 190 record closes. The 1990s, a generational bull market, printed 311. 2000s was the lost decade with the dotcom crash and the financial crisis which printed just 13 new highs. And then the 2010s came back with 242 records. And then the 2020s, o, we've already printed around 215 record closes through May of 2026. At this pace, the 2020s could end up being the best decade ever. Now, look, I've never been one for chasing. I actually prefer buying good assets at good prices, and even better so if it's on a massive dip. However, the data actually suggests that it doesn't really matter that much when you're looking at broader markets. If you look at buying at highs versus random days, city's Wealth Investment Lab ran a study covering every record high day from January 1960 through July of 2025, 1,195 record closes in total. And they asked a very simple question. If you bought the S& P 500 specifically on a record high day, did you do worse than someone who bought on a random Tuesday? Well, the answer is that statistically you had statistically identical returns over a 1-year, 3year, and 5-year holding period. Let me say that again because it's pretty important. 65 years of data, every single record high since 1960. And buying at the top produced the same forward returns as buying on any other day of the week. So, the fear that you're going to get destroyed buying into markets at a high is based really on doom vibing. It's not based on actual performance. Next, we got to talk about the cost of waiting for a dip. As somebody who's been on YouTube for many, many years, I'll see the same comments again and again. I'm just waiting for a 5, 10, 20% dip. I'm waiting for a crash, and then when the crash comes, I'm waiting for it to go down even more. No, it's not down enough. And then when it is down enough, they're like, okay, things are just too bad. They'll never come back. Do maxers love the phrase, be greedy when others are fearful, and fearful when others are greedy. But the problem is that in reality, what they are is fearful when others are greedy and also fearful when others are fearful. And so what ends up happening is people just never buy the dip or they never put in that extra capital. City looked into this too. They said the average weight for even a 5% pullback after a record high is 143 trading days. That's almost 7 months on the sidelines. People who held out for that 5% drop were only invested 62. 5% of the time. The folks waiting for a 10% drop an average of 225 trading days. And they were invested less than 45% of the time. Out of the market more than half the time. They're missing compounding. and they're missing the run. Compare that to somebody who just bought at the high. Well, they were invested 100% of the time. They were present for all of the best days of the market. There was zero opportunity cost there. Meanwhile, those who are just stacking cash, cash for many, many years while markets go higher, well, not only are they going to have to buy back into markets at much higher levels, but also their cash just completely got destroyed. So, when you hear, I'll just wait for a pullback. I want to stay out of markets until a pullback happens. Well, historically, that's one of the worst trades you can make. It'd be better just to buy slowly over time, good assets at good prices. and of course plow heavier when you get those big dips. Okay, let's talk about
things to know. Okay, now it's time for our main entree. The stock that I believe will change early buyers lives. So, if you put me in a little room and you said, "Charlie, you have to name one stock. One stock and if it does well year-over-year, by the end of next year, we'll let you out of the room. " Well, the stock number one would be Service Now. And the reason is because it's down so much. The business model itself is so great. And almost all of the discount is due to panic SAS apocalypse rhetoric. rhetoric that by the way is based on something that Service Now has already fixed for itself. Service Now stock is down about 58% from its highs. A company growing revenue 21% a year, pulling in 4. 6 billion in free cash flow, sitting on 12. 85 billion in contracted future revenue. Now, Wall Street isn't selling NO because the business is broken. No, no. They're selling it because every software stock has gotten dumped into the same garbage can under the whole SAS apocalypse narrative. Now, a quick rundown on what Service Now does. If you're a big company, a bank, a hospital, federal agency, Fortune 500, well, there's thousands and thousands of internal processes. If you think about just new employee starts, a dozen things have to happen. Laptop ordered, email created, badge issued, software access granted, training scheduled. Now, multiply that across HR, IT, finance, legal, customer support. It's an absolute mess. Service Now is the platform that runs and automates all of it. Their flagship product, the configuration management database, is the master map of every piece of software, hardware, and process inside a giant enterprise. It's the brain stem of corporate IT. Their software isn't optional. It's not a nice to have. It's not a tool one employee uses for one task. It's actually the system of record an entire IT department runs on. Built up over years of audit trails, security permissions, custom workflows, and compliance requirements. Once a Fortune 500 has it deployed, ripping it out would take years and cost a fortune. This is the same kind of moat that made Microsoft Windows untouchable for decades. Service Now isn't a SAS app. It's actually the plumbing. and plumbing doesn't get cancelled because of a shiny new AI tool, despite what the doomy mcdoomies want to say. Now, let's talk about the fear that's hammering the entire software sector. So, it's called seat compression. Basically, if AI agents can do the work of five employees, well, companies don't need as many software seats, so subscription revenue collapses. That's the bare case behind the entire SAS apocalypse. On paper, it sounds scary, sure, but for Service Now specifically, the numbers are actually saying the opposite. So, if you care about numbers over narrative, well, things are very, very different. And once you actually look at them, the panic story in my view falls completely apart. So if you start with the seat business, the part that's supposedly getting eaten alive. Well, subscription revenue grew 21% last quarter. CRPO, which that grew 25%. They closed 244 deals worth more than $1 million each in a single quarter if AI was killing seatbased software. Service Now seat business should be shrinking. However, it's not. It's accelerating. So it's going in the complete opposite direction of the narrative. Now, why is that? Well, for starters, the people paying for Service Now seats are fulfillers. They're called fulfillers. IT staff, HR specialists, security analysts, customer service leads, these are the people running missionritical workflows. AI isn't replacing them. No, no. It's being deployed next to them to make them more productive. And every AI deployment puts more work through Service Now's platform, which makes these seats more valuable, not less. Take a look at how this shows up on the financials. So, Service Now pulled in 4. 64 billion in free cash flow last year at a 35% free cash flow margin. That's a higher cash conversion rate than Apple, Microsoft, or Google. Gross margins are 77. 5%, operating margins are 15% and still climbing with another five or six points of room as the business scales. So, this isn't some growth at all cost story burning cash and hope full of opium. No, no. It's actually a money printer and the money printing is running faster at the same time that the stock is going down. Perhaps the most important part of the story here is that Service Now isn't just defending its seat business. They're actually also winning the pivot away from seat pricing. Their CFO said in late April that more than 50% of new business is now coming from non seat pricing models. The exact transition that's supposed to be killing SAS. Service Now is leading it. Half of every new dollar they sign is already on this new model. So two things here. Number one, the seat pricing model is actually expanding rapidly. Clients love it. Point two, the nonseat model is expanding rapidly too. And it's industryleading. Service Now saw the SAS apocalypse coming. So they've already been aggressively building out their non-seat pricing business model and it's the best in the world. And on top of that, their actual seat pricing model is expanding rapidly as well, showing that clients continue to want to use their seat pricing, too. Now, back in April, Service Now rolled out three new tiers, Foundation, Advanced, and Prime. Each with built-in AI token pools customers commit to upfront. Heavy users pay overage when they blow past their pool. They call it a toolgate model and it works just like a utility charging for electricity. The more work service now's platform performs, the more they get paid. Every AI agent an enterprise deploys, every workflow these agents kick off, every transaction they run, it all goes through this meter. So this flips the entire SAS apocalypse thesis on its head. Completely destroys it. I would argue the whole bare case is that AI does more work, so companies need fewer humans, so software vendors collect less. Service Now's Tollgate model breaks the link between revenue and headcount completely. AI does more work, more workflows through the platform and Service Now gets paid more. They've lined themselves up to succeed in the same wave that everybody thinks is going to destroy them. So anyways, that's my take. I think right now is a generational buying opportunity for Service Now stock, ticker symbol NO. You can let us know your thoughts down
below. And now it's time for our sponsored segment on Bonsai International, ticker symbol BNZI. Bonsai is an AI powered marketing and sales technology company. At its core, Bonsai builds software that helps businesses do the four things every marketing team is trying to do better. Find the right audience, engage them with great content, capture and enrich data along the way, and measure what's actually working. The company's flagship product, Demio, is an AI enhanced webinar and virtual events platform used by enterprise marketing and sales teams to run live and on demand events around Demio. Bonsai has assembled a portfolio of complimentary AI powered tools for video production, video animation, audience targeting, web development, and sales acceleration. All designed to make marketers dramatically faster and more effective at their jobs. So, what's the market gap here, Charlie? The average enterprise marketer today is juggling well over a hundred separate tools, and the fragmentation creates disjointed customer experiences, siloed data, and a constant operational headache. Buyers expect personalization, AI is rewiring how marketing gets done, and CMOs are openly looking to simplify their stacks rather than add more vendors. The global martekch market is on a clear long-term growth trajectory expected to expand into a multi-t trillion dollar category over the next decade. Now, here's where Bonsai comes in. So, so Bonsai operates as a SAS platform built around a portfolio of AI powered products, each targeting a specific point in the marketing and sales workflow. Demio is the company's webinar and virtual event platform augmented with AI moderation that helps hosts run smoother, more engaging events. Open reel is an enterprisegrade remote video production tool used by marketing and content teams to produce high-quality video at scale without the cost of traditional production. Create Studio is an AIdriven 3D video creation and animation product with a large creator base. Superblocks, acquired in November 2025, is an agentic AI platform that lets marketers describe what they want in plain language and have the AI build and host professional websites, landing pages, and event registration pages, eliminating the need for rigid template builders or developer time. Boost and reach handles audience targeting and event amplification, helping customers fill the top of the funnel. Now, the thread tying it all together is AI. Bonsai is embedding AI capability, shared authentication, and a unified data layer across the portfolio, so customers get a connected experience instead of a stitched together patchwork of disconnected tools. The petting acquisition of Connect and Sell and AI sales acceleration platform would extend Bonsai's reach from marketing engagement into outbound sales execution. Now, the deal is currently structured as a non-binding letter of intent and is expected to close in early Q2 2026 subject to definitive agreement and closing conditions. The customer base is genuinely impressive for a company of its size. Bonsai serves a global footprint spanning dozens of countries with deep penetration in healthcare, financial services, and enterprise technology. Customer relationships include names like Autodesk, Garage, Adobe, Capital 1, Crowdstrike, Bristol Myers, Squib, United Health Group, Service Now, RBC, Huelet, Packard Enterprises, Dell Technologies, New York Life, and Thermoffisher Scientific. That kind of blue chip logo book is hard to build and signals real product market fit at the enterprise level. Bonsai is led by founder Joe Davyy is chairman and CEO, who has been the architect of the company's AI platform vision from day one. The senior team has been materially upgraded over the past year. Dean Ditto joined as chief financial officer, bringing decades of finance experience. Michael Curtsman came on as chief revenue officer and Mac. Mccertie joined as VP of sales, a deliberate buildout of the go-to market function as Bonsai scales into the enterprise. The team's product roadmap balances internal AI development with selective acquisitions of profitable AI aligned businesses that expand the platform. Now, of course, this is a small cap and small caps are quite risky. Bonszai has historically relied on debt facilities and at the market equity issuance aka dilution to fund operations and acquisitions which of course creates ongoing and further dilution and refinancing risk. The connect and sell deal is still a non-binding agreement and we have to see where that goes. Bonsai is still operating at a loss and the path to sustainable profitability depends on successful execution of the platform vision and continued enterprise customer expansion. And as always, small caps carry elevated volatility and liquidity risk. So things to be aware of. But anyways, the overall story here is that Bonsai is a focused AI powered marketing technology company with a real product portfolio, a blue chip enterprise customer base, and a clear vision for what an AI native marketing platform should look like. Deio anchors the offering and the surrounding products, video, web development, audience targeting, and now sales acceleration extend Bonsai's ability to support customers across the full marketing workflow. Anyways, if you want to learn more about Bonsai, I'll put the link to them in the description down below. Have a great rest of your day. We'll see you in the next video.
