The author argues that large SaaS software vendors are facing significant PE ratio compression as AI disrupts the traditional software business model.
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The meme of the last decade was that software was eating the world. Now it appears that AI has begun to eat software. Large SaaS software vendors have experienced huge compression of PE Ratio's (over 50% from peak) in the last 10 years.
[https://userupload.gurufocus.com/2012464369207779328.png](https://userupload.gurufocus.com/2012464369207779328.png)
*The PE Ratio used is PE without Non-Recurring Items. Data from Gurufocus.*