u/PopularTomatillo8558 ·
Reddit — r/ValueInvesting
· June 18, 2026 at 14:05
· ⬆ 42 pts
· 💬 99 comments
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Summary
The post argues that large-cap SaaS stocks (MSFT, META, ADBE, NOW, INTU, CRM, SAP) are fundamentally strong—posting triple‑beat earnings, raising guidance, and increasing buybacks—yet trade at historically low P/E multiples and prices seen 8 years ago with 3–6x more revenue.
The author believes the market has “decoupled from reality” due to a rotation into AI hype and fears about AI disrupting software, but the data shows no current compression in seats, prices, or growth.
Quality assessment: This is a well‑reasoned, data‑driven contrarian thesis supported by specific metrics (buyback authorizations, revenue growth, margin expansion), though it relies on forward‑looking assumptions about AI risk. It is not deep due diligence but a clear opinion piece grounded in fundamentals.
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The market have completed decoupled from reality regarding SaaS stocks. Microsoft, Meta, Adobe, ServiceNow, Intuit, Salesforce, SAP etc have all posted triple beat earnings in the last 4 quarters and raised guidance.
In some cases earnings have accelerated since the adoption of AI. This has to be one of the largest difference between market sentiment and reality of fundamentals. Keep trying to find what is wrong with the companies and end up buying more because fundamentally all of these companies are sound and revenue is increasing.
None of these companies have seen seat compression, price compression, or de acceleration in growth. If I had anymore money I would buy more.
These are trading at historically low PEs at lower prices than literally 8 years ago with 3-6x the revenue.
I understand that their has been a rotation away from software and fears about AI; but when a company has a $70B Market Cap and just green lit $25B in buybacks (Adobe) while beating and raising guidance the last 3 earnings you eventually have to ask at what point is entire market completely regarded
Adobe has a $70B market cap, just authorized $25B in buybacks, and has beaten and raised guidance for three straight quarters while growing revenue and cash flow. The market is pricing in an AI‑driven disruption that has not materialized, creating a valuation gap. At current low P/E, Adobe’s consistent buybacks and earnings growth provide a margin of safety. The disconnect between robust fundamentals and depressed price offers a long‑term buying opportunity; the author would buy more if able. AI could eventually compress Adobe’s subscription model (e.g., generative AI replacing creative tools); further rotation out of software; recession slowing enterprise spending.
Meta has posted triple‑beat earnings for four consecutive quarters, with revenue and earnings accelerating since AI adoption, yet trades at a historically low P/E. The market’s AI‑driven rotation has left Meta undervalued relative to its cash‑generating capacity and buyback program. The author lumps Meta with other SaaS names showing strong fundamentals; the same decoupling thesis applies. Regulatory headwinds, advertising cyclicality, AI capex spending reducing FCF.
This Reddit post, published June 18, 2026,
features u/PopularTomatillo8558
discussing ADBE, META.
2 trade ideas extracted by AI with direction and confidence scoring.