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Feb 12
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AVOID
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Min Min Low
Reporter, Hong Kong
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A Chinese company (implied DeepSeek context) launched a model with double the parameters at a lower cost, which "led to a software selloff in the U.S." The rapid advancement and commoditization of AI models by Chinese competitors are eroding the pricing power and "moats" of traditional US software companies. Cheaper, open-source, or foreign alternatives are undercutting the "per-seat" SaaS pricing model. Avoid US Software stocks exposed to AI deflationary pressure. US trade barriers or tariffs blocking Chinese software adoption. |
Bloomberg Markets
Trump Tells Netanyahu He Prefers Iran Deal | ...
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Feb 10
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SHORT
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Deirdre Bosa
Anchor/Reporter, CNBC Tech Check
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"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
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