Two of WallStreetBets' most-watched stocks moved in opposite directions in premarket trading Thursday, as earnings reports reshaped investor sentiment before the opening bell. ServiceNow (NOW) jumped 7.5% after posting stronger-than-expected second-quarter results, while Tesla (TSLA) slid 6% following a decline in adjusted earnings.
ServiceNow: AI-Driven Growth Lifts Shares
ServiceNow, an enterprise software company that helps businesses automate workflows, saw its shares reverse a 6.5% decline from Wednesday's close to trade sharply higher premarket. The company reported higher adjusted earnings and revenue for the second quarter, driven in part by strong demand for its artificial intelligence products. Earlier this year, ServiceNow announced that its AI offerings had hit $1 billion in contracts, lifting its 2026 revenue forecast. The latest results suggest that momentum is continuing, with AI agents and automation tools attracting new customers and expanding existing deals.
For everyday investors, ServiceNow's performance underscores how software companies with a clear AI strategy are being rewarded by the market. The stock's premarket surge indicates that traders expect the company to maintain its growth trajectory, even as broader tech valuations remain elevated.
Tesla: Profit Squeeze Weighs on Sentiment
Tesla's premarket slide tells a different story. The electric-vehicle maker reported a drop in adjusted earnings for the second quarter, as price cuts and increased spending on AI and automation projects squeezed margins. While Tesla's revenue still grew year over year, the profit decline disappointed investors who had hoped for a stronger recovery after a challenging first quarter.
Tesla remains a favorite among retail traders on platforms like WallStreetBets, but its stock has been volatile in 2024 as the company navigates slower EV demand, rising competition from Chinese automakers, and the high costs of scaling its Full Self-Driving technology. The 6% premarket drop suggests that traders are pricing in a longer road to profitability improvement.
What It Means for Investors
The split between ServiceNow and Tesla highlights how earnings season can quickly reset a stock's narrative. For retail investors, premarket moves are an early signal of how the broader market will react when regular trading begins. However, premarket trading can be thin and volatile, so moves may not fully reflect the eventual close.
ServiceNow's jump shows that companies with strong AI-related growth are still attracting buyers, even in a market that has become more selective. Tesla's decline, meanwhile, reminds investors that even high-profile names face headwinds when earnings fall short of expectations.
Both stocks are widely held by individual investors, so the divergent moves could create opportunities for those looking to rebalance or adjust positions. As always, earnings reports provide a snapshot of a company's health, but long-term investors should consider the broader trends—such as AI adoption for ServiceNow and EV market dynamics for Tesla—before making decisions.
For more on how earnings are shaping market moves, check out our coverage of Netflix's premarket slide after mixed earnings and Super Micro Computer's surge alongside Micron's slip.
