Software's relative strength and sound finances make institutional rotation from semis plausible. It could lead while semis consolidate, despite slow growth at some firms; the market rewards cash flow, healthy balance sheets and manageable debt. Salesforce, ServiceNow, Palantir, Shopify and Workday hold up; SAP's cloud and AI shift, Instacart's massive 10-month base, Veeva's massive five-year base and Atlassian's Stage 2 strength add to the case. Semis may still rally; the view can change. x.com  … Show more

Toast's revenue growth and profitability should eventually lift its shares, but stock compensation has diluted shareholders despite those gains. Revenue has grown 250% since the IPO; shares outstanding rose from 502.5 million to 578 million, or 15%, with an estimated $2.4-3 billion in stock compensation. Management needs to deliver a 30% net profit margin ASAP to prove it can turn revenue growth into earnings for shareholders. Buybacks are now reducing the share count, which should help a lot. … Show more

AI is forcing a repricing of the enterprise software business model, and for ServiceNow and SAP the reset is not finished. Claude Managed Agents eased production AI deployment, ServiceNow's AI bundling raised monetization questions, and SAP warned of short-term pain like its cloud-migration margin squeeze. Multiples compress before new economics are understood, and most software still trades at a premium on GAAP P/E and EV/FCF ex-stock comp. Workday at 1.7x revenue hints at a floor. x.com 

Oracle, down 50% from its $340 high while other hyperscalers are down about 15%, just had every fear behind the drop addressed in one earnings call. 90% of data center capacity is already funded, margins are guided to 32% versus 27-28% expected, and it added $30B of new business in 90 days without extra funding. Organic revenue and earnings both grew 20%+ for the first time in 15 years, 2027 revenue guidance rose to $90B, and the pipeline tops $530B. It can pass $200 fast. x.com  x.com  x.com  … Show more

Workday at 3x sales is a travesty for a business of its quality, implying the market expects management to destroy value through poor capital allocation on top of AI fears. It could likely raise margins toward 30% without much customer impact, given bloat and complacency; the same factors that make it easy to catch up also make it easy to run more profitably. Venture valuations like Rippling's make more sense with Workday at 6-8x sales. x.com  x.com  x.com 

Workday's Q2 was totally fine, and the business is steadier than the bearish narrative implied. Growth relies on upselling a mature HCM and finance base, giving about 10-12% revenue growth, while margins have plenty of room to rise from 14% GAAP. AI is only 6% of revenue, so the business is unlikely to change much. The real risk is big companies shifting spending to hotter AI tools such as Claude. A sale anywhere below $250 would be insulting to shareholders, and 20x earnings power is not crazy. … Show more

SaaS buybacks are now big enough to shrink share counts, not just offset stock-based compensation, a structural change the market is missing. Per Needham, 10 covered SaaS companies have buybacks over 10% of market cap, and ten more, including monday.com, Zoom, Freshworks and Similarweb, hold net cash above 20% of market cap. DocuSign's buyback alone should lift 2026 FCF per share about 8%. FCF per share is what compounds, and when sentiment turns, multiples expand on a smaller float. x.com