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 

Workday's problem is not vibe coding but fundamentals that have deteriorated since 2022. It spends 35% of revenue on R&D yet produces no products or features that drive growth, while spending heavily on acquisitions. @CapitalObserver notes it has nearly 15% short interest despite a forward free cash flow yield above 5%. x.com 

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.com 

Workday is exposed because Anthropic has declared war on the enterprise: it hired Workday's CTO, who left after 11 months, and then posted that it is building its own Workday. AI got better and Anthropic started shipping like crazy, so buying the dip looks misguided. x.com  x.com  x.com 

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 

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 

monday.com is priced as if growth will soon turn negative, which is far from certain, at 1.1x 2027 EV/sales and 9x 2027 EV/FCF excluding SBC. It still grows in the high teens with 110% net dollar retention and just bought back a lot of stock. AI clearly threatens its UI/UX edge, but its AI features, integrations and security and governance may be hard for purely agentic tools to replicate; shorts seem to be pressing. x.com  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

Workday has 61% upside, according to a bot's model. x.com 

Software stocks probably have a floor as results challenge fears that AI agents will displace them. Since the June 22 momentum unwind, IGV is up 25% and the SOX index down 22%. Atlassian and Salesforce jumped on solid results, plus an Anthropic deal for Salesforce, and possible Silver Lake interest lifted Workday. A new bullish twist says agents will use software tools 10-100x more than humans. Whether fundamentals back the rally is still open; a likely Fed hike and weak September are risks. … Show more