Gublo
Small/Mid-Cap Trader, Multibagger/Penny Stocks, Earnings Analysis & Signals
Adobe, Salesforce and ServiceNow still generate massive cash flow, push deeper into AI and sit at the center of enterprise operations. Three of the biggest SaaS names remain beaten up in 2026; their valuations have been crushed, but the long-term opportunity may not have been. The market has swung way too far against them. x.comÂ
Workday looks undervalued, with multiple valuation models putting intrinsic value near $165, a 15-16% discount, despite fears that AI will disrupt SaaS and weak enterprise software guidance from IBM. Its AI agents run at enterprise scale for over 4,000 clients, its 12-month subscription backlog grew more than 15%, and non-GAAP operating margin widened to 31.8% as management raised full-year profit guidance. x.comÂ
Software looks like a group that can lead the market higher, with many names from Palantir and ServiceNow to Zeta and MongoDB moving from late Stage 4 or Stage 1 into early Stage 2 uptrends. Sentiment is at an all-time low on fears that AI agents and chatbots will replace SaaS. AI will disrupt some areas, but many software businesses are using it to grow revenue, ship faster and expand operating leverage, and will thrive. The charts will separate survivors from the dead. x.com x.comÂ
The software selloff looks overdone, as AI seems to be creating dispersion rather than killing software. All 13 S&P 500 software companies that have reported so far beat EPS estimates, and software stocks are up about 40% from their April lows. x.comÂ
Atlassian won't grow beyond inflation because nearly everyone already owns its product, so its rally is simply the market bidding up software as money rotates out of semiconductors. @sv_techie notes 28% growth last quarter and 26% for fiscal 2026, but guidance of 19.7% for the next quarter and about 13% for fiscal 2027. x.comÂ
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.comÂ
Software stocks may benefit from the AI displacement trade's complete reversal through 2026: instead of AI supposedly displacing traditional software companies, software companies could potentially displace the AI trade itself. x.comÂ
Paycom's buyback of 20-25% of its float over the past year makes little sense when ruthless AI implementation is everything and its cost of capital is rising sharply. The stock is down 55% over five years despite strong cash flow, it is not at an entry point, and management has yet to prove itself. x.com x.com x.com x.comÂ
The rally in US software stocks is really long in the tooth, if anyone is still left who believes AI alternatives run by one- or two-person shops can cannibalize a lot of software. x.comÂ
Software stocks such as Adobe sold off on a threat that was never real: the AI labs' internal plans to compete with them were delusional and never a real possibility. x.comÂ