ServiceNow's unexpected expense surge makes its rich valuation more vulnerable in a struggling software sector. Revenue rose 21%, but spending drove an EPS miss and one quarter of guided cRPO deceleration; wider market conditions could hurt near term. The 20% selloff looks excessive, and few software companies should benefit as much from AI. Management could deliver over 3-5 years, though the stock is only close to a buy again now; below $100 looks good for the long term. x.com  x.com  x.com  x.com 

Software stocks are losing their scarcity premium because the price of intelligence is collapsing faster than any technology on record. PC prices took 15 years to fall 90%; LLM prices did it in under three, and quality-adjusted intelligence became nearly free within 30 months. Every SaaS multiple was a bet that writing software stays expensive, and that bet is unwinding five times faster than in the PC era. Companies selling intelligence get squeezed, while those applying it gain. x.com 

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.com 

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.com 

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.com 

Software stocks should keep grinding higher as the market reduces the AI fear factor. Much of the software rally since the April lows was just erasing past losses, and many names remain well below their all-time highs. Since those lows, software has risen almost as much as semiconductors with about 10x less noise. x.com 

The software selloff will last a while unless software companies invest to accelerate revenue growth, from 10% to 20-25% or from 20% to 30-40%, which will not be easy. Sentiment should change at some point. x.com 

Software is nowhere near a floor because AI has broken the assumption behind the sector's premium: very long-duration, highly recurring revenue. Competition is intensifying, new products such as Anthropic's suite far outperform incumbents like Microsoft Copilot, and AI natives move faster without legacy constraints. Accounting flatters results, with Snowflake's SBC above its CY25 free cash flow. Even at 30x GAAP earnings most names have downside, versus Alphabet at 23x and Nvidia at 14x. x.com  … Show more

Software stocks trade at their lowest forward P/E ever, so every software company showing improving, let alone accelerating, earnings should fly. x.com 

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.com