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Feb 18
|
|
$82.00
$82.00
+0.0%
|
SHORT
|
CNBC
|
The article explicitly states the iShares Expanded Tech-Software Sector ETF has "slumped more than 23%" so far this year due to "fears that AI will render their business models obsolete." This is not an isolated incident but a broad, sector-wide trend driven by a powerful and persistent narrative of AI disruption. The PANW story is just another data point confirming the intense pressure on the entire sector. A medium-term short position on the software sector as a whole, using the ETF as a vehicle. The thesis is that the AI disruption fear is a structural headwind that will continue to weigh on the valuations of traditional software companies. The selloff may be overextended, making the sector ripe for a sharp relief rally. A major positive catalyst from a large-cap software name or a shift in the AI narrative could invalidate the trade. |
Finnhub - PANW
Palo Alto shares sink 7%, CEO defends cyberse...
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|
Feb 18
|
|
$82.00
$82.00
+0.0%
|
N/A
|
Finnhub News
|
— |
Finnhub - IGV
Wix, Intuit Expand Partnership To Power Small...
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Feb 17
|
|
$80.96
$82.00
+1.3%
|
AVOID
|
Julie Biel
Portfolio Manager, Kayne Anderson Rudnick
|
Biel argues software businesses that are just "optimizing" or "automating" without proprietary data are "ripe for disruption." Lee (Oaktree) adds that private credit has a "much higher bar" for software, specifically avoiding "coding companies" that can be displaced by AI. The "AI Scare Trade" is real. Companies that previously enjoyed "safe haven" status are now viewed as at-risk of obsolescence. If private credit pulls back lending to these firms, their liquidity and growth stifle. Avoid generic/legacy software stocks. AI adoption might be slower than expected, allowing legacy tech to adapt. |
Bloomberg Markets
Stocks Gain as Tech Holds Up; Bonds Steady | ...
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Feb 17
|
|
$80.96
$82.00
+1.3%
|
AVOID
|
Josh Brown
CEO, Ritholtz Wealth Management
|
"The valuation of the software industry has undergone a sharp correction. PE topped out a year ago at 51 times earnings and now it's 27... The vertical software companies... this is the Pincer move from above [and below]." Software is "Ground Zero" for AI disruption. Vertical SaaS is being squeezed by frontier models (Anthropic/OpenAI) offering capabilities for free, and cheap AI startups undercutting pricing. Despite lower valuations, the obsolescence risk is too high. AVOID Legacy SaaS and Vertical Software stocks lacking proprietary data or "system of record" status. Software stocks could rebound if they successfully integrate AI to reduce costs and boost margins. |
The Compound News
“Unrealized” Capital Gains Tax is Economic Su...
|
|
Feb 17
|
|
$80.96
$82.00
+1.3%
|
N/A
|
Finnhub News
|
— |
Finnhub - IGV
Micron: DDR5 Prices Surge +400% Since Septemb...
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Feb 17
|
|
$80.96
$82.00
+1.3%
|
N/A
|
Finnhub News
|
— |
Finnhub - IGV
What's Going On With Palo Alto Stock On Tuesd...
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Feb 17
|
|
$80.96
$82.00
+1.3%
|
N/A
|
Finnhub News
|
— |
Finnhub - IGV
Magnificent 7, Bitcoin And Software: Why It's...
|
|
Feb 16
|
|
$82.77
$82.00
-0.9%
|
N/A
|
Finnhub News
|
— |
Finnhub - IGV
6 Sectors Rally While AI Stocks Are 'Skating ...
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Feb 13
|
|
$82.77
$82.00
-0.9%
|
SHORT
|
Peter Tchir
Head of Macro Strategy, Academy Securities
|
Tchir notes we are transitioning to a world where AI disrupts companies with high margins that rely on people and intellectual property, rather than physical assets. The "AI Fear Trade" is targeting companies where headcount can be decimated by LLMs. Investors are unwinding leverage in these names, viewing them as the "victims" of the next industrial revolution. SHORT Software and high-margin tech services that lack physical moats. AI productivity gains could eventually boost margins for these companies rather than destroy them. |
Bloomberg Markets
Bloomberg Surveillance 2/13/2026
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Feb 13
|
|
$82.77
$82.00
-0.9%
|
LONG
|
Jonathan Golub
Chief US Equity Strategist, UBS
|
"If you look at the tech basket relative to the rest of the market, it's earnings are on fire... and it's multiples are down 20% versus the rest of the market... there's also a bunch of things in the software space that are dislocated near-term." Tech is historically cheap relative to its own growth metrics. The "dislocation" in software suggests an oversold condition that will revert to the mean as earnings continue to outperform the broader S&P 500. Long Broad Tech and Software. Higher for longer interest rates compressing long-duration asset valuations. |
Bloomberg Markets
The Tech Basket of Stocks Is 'Incredibly Attr...
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|
Feb 13
|
|
$82.77
$82.00
-0.9%
|
N/A
|
Finnhub News
|
— |
Finnhub - IGV
Diversify, But Do Not Abandon Tech
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|
Feb 12
|
|
$80.96
$82.00
+1.3%
|
LONG
|
Richard Saperstein
Founding Principal and CIO of Hightower Treasury Partners
|
When asked about the software sell-off, he says, "Investors should look at IGV... buying that whole IGV." He explicitly advises against buying individual smaller names because it is "dangerous." Software is in the "crosshairs" of AI disruption. While the sector will grow, individual stock picking is risky because some legacy companies will fail. Buying the basket (IGV) captures the sector's recovery and AI adoption without the idiosyncratic risk of a single company being displaced. LONG. Use the ETF to play the software rebound. Broader tech sector correction; high valuations in software relative to rates. |
CNBC
Stock pullback presents opportunities for cli...
|
|
Feb 12
|
|
$80.96
$82.00
+1.3%
|
N/A
|
Finnhub News
|
— |
Finnhub - IGV
Intuit Will Likely Survive The SaaS-Pocalypse
|
|
Feb 12
|
|
$80.96
$82.00
+1.3%
|
LONG
|
Tom Lee
Managing Partner and Head of Research, Fundstrat
|
Scott Wapner suggests AI is a "shooting gallery" taking down software stocks. Lee counters: "To me, I think what we're seeing is that there is a payoff coming from AI... It ultimately is productivity." The market consensus is currently fearful that AI will replace traditional software (SaaS) companies, leading to a sell-off. Lee argues the "Second-Order Effect": AI is actually a tool that these companies will integrate to drastically improve their own productivity and product value. The current bearish sentiment on software is a mispricing of this productivity boom. LONG. Buy the software dip caused by AI fears, betting on the productivity realization. If AI adoption slows or if "Hyperscalers" stop spending (as noted by the host), the productivity thesis may be delayed. |
CNBC
Tom Lee: If Gold can rerate higher, then so c...
|
|
Feb 11
|
|
$83.23
$82.00
-1.5%
|
LONG
|
Dan Suzuki
Investment Strategist, Schroders
|
Suzuki notes a "wholesale selloff" in the software space due to fears that AI will replace legacy SaaS models. The market is "throwing the baby out with the bathwater." Many software companies are partnering with AI firms rather than being displaced. Valuations have compressed significantly compared to the "Mag-7." LONG. This is a contrarian value play within tech. Structural disruption from AI agents could actually render some "seat-based" SaaS models obsolete. |
Bloomberg Markets
Stocks Steady After Strong Jobs Data Dims Rat...
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|
Feb 11
|
|
$83.23
$82.00
-1.5%
|
SHORT
|
Alexandra Semenova
Bloomberg Reporter
|
Software stocks (IGV) fell ~4% and the "Mag Seven" index dropped 1% following the jobs report. Semenova notes a narrative shift: investors are no longer just worried about AI CapEx spending, but are now pricing in "AI coming for different industries... replacing a lot of the companies' business models." This is the "AI Deflation" thesis. If AI agents replace human workers, "seat-based" SaaS pricing models collapse. Companies that charge per user (System of Record) face existential revenue compression. The sell-off is not broad panic; it is a targeted liquidation of legacy tech/software in favor of other sectors. SHORT. The rotation out of software is structural, driven by the realization that AI is deflationary for software revenues. Oversold bounce if tech earnings show resilience in seat retention. |
Bloomberg Markets
Strong Jobs Report Curbs Fed-Cut Bets | Balan...
|
|
Feb 11
|
|
$83.23
$82.00
-1.5%
|
AVOID
|
Josh Brown
CEO, Ritholtz Wealth Management
|
"We are separating the market into two camps... Information merchants... and legacy platforms... the value of selling information to people is declining at a precipitous rate." For 15 years, the market fetishized "asset-light" software models. AI has flipped this. If AI reduces corporate headcount, the "per-seat" pricing model (SaaS) of companies like Salesforce and Workday collapses because there are fewer humans to sell subscriptions to. Furthermore, AI can replicate "information merchant" value propositions cheaply. Avoid "Vertical Market Software" and companies selling pure IP/Information; they are the "losers" in the AI shift. AI adoption might be slower than expected, or these companies successfully pivot to consumption-based pricing. |
The Compound News
Is It Time to Buy Software Stocks?
|
|
Feb 11
|
|
$83.23
$82.00
-1.5%
|
LONG
|
Bill Ford
Chairman, Ford Motor Company
|
"Ten years ago, software companies were valued at about four times revenue... they went all the way up to 10 to 12 times... they've come back down to where they were about four times revenue." The valuation bubble in SaaS has burst, returning multiples to historical norms. However, the business models remain "durable" and critical. This suggests the downside risk is priced in, while the business quality remains high. Buy the valuation reset in Enterprise Software. AI agents potentially replacing "seat-based" SaaS pricing models. |
Bloomberg Markets
.General Atlantic CEO Ford on Current Investi...
|
|
Feb 11
|
|
$83.23
$82.00
-1.5%
|
LONG
|
Michael Batnick
Managing Partner, Ritholtz Wealth Management
|
Software stocks have crashed violently (IGV -33%, MSFT -25% wiping out $357B). There was a "panic liquidation" and "puke" in volume on Thursday. While the long-term moat of SaaS is legitimately threatened by AI coding agents (deflationary pressure), the short-term sell-off is an emotional overreaction. When a sector is "held underwater" this long and sellers exhaust, it acts like a buoy and pops back up. Buy the panic for a tactical bounce. The structural bear case (AI replaces SaaS) is true; margins compress permanently. |
The Compound News
What Would You Do With $3 Million? | Animal S...
|
|
Feb 10
|
|
$85.41
$82.00
-4.0%
|
SHORT
|
Deirdre Bosa
Anchor/Reporter, CNBC Tech Check
|
"The software sector as a whole is getting decimated because every AI breakthrough here is being seen as a threat." Second-order thinking suggests that if AI can write code or automate enterprise workflows (like the Monday.com example mentioned), the "seat-based" pricing model of SaaS companies is in danger. The market is pricing in terminal value risk for software firms that don't own the underlying model. Momentum Short. The narrative has shifted from "AI benefits Software" to "AI replaces Software." Oversold bounce if earnings show AI is actually increasing seat retention. |
CNBC
U.S. vs. China AI spending gap widens
|
|
Feb 09
|
|
$85.06
$82.00
-3.6%
|
AVOID/WATCH
|
Steve H.
Quantitative Researcher at Bloomberg / PhD in Financial Econometrics
|
Steve argues that Software (SaaS) is facing "Knightian Uncertainty." AI allows companies to "vibe code" their own internal tools, threatening the pricing power and moats of enterprise SaaS models. SaaS valuations were based on high growth and infinite margins. If AI reduces the need for seat-based subscriptions or allows cheaper internal alternatives, the premium valuations (PE ratios) must compress significantly. AVOID. Until the "winners" who successfully integrate AI (like Databricks) are separated from the "losers" (generic reporting software), the sector is a value trap. AI adoption actually accelerates SaaS usage rather than replacing it. |
Thread Guy
WTF is crypto doing!? Are we BACK..? AI takin...
|
|
Feb 09
|
|
$85.06
$82.00
-3.6%
|
SHORT
|
Deirdre Bosa
Anchor/Reporter, CNBC Tech Check
|
The rise of AI agents is "fuel for the software bears." Monday.com dropped 22% on a disappointing outlook, and Workday's stock has lost nearly half its value over the past year. Historically, companies paid SaaS vendors because building software internally was too hard. Now, AI agents allow non-tech companies (like AT&T or Mercedes) to build their own custom software cheaply and quickly. This shrinks the competitive advantage (moat) of traditional software-as-a-service vendors. Databricks data shows 80% of databases are built by agents; the IGV software ETF is lagging significantly. Traditional vendors may successfully integrate AI to retain value, or the "build vs. buy" trend may revert if internal tools prove difficult to maintain. |
CNBC
Databricks finishes $5 billion funding round ...
|