What's your time horizon for SaaS stocks? When do you actually expect a return?
u/Alicyclobacillus ·
Reddit — r/ValueInvesting
· June 19, 2026 at 22:02
· ⬆ 15 pts
· 💬 100 comments
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Summary
The author, skeptical of SaaS stocks, questions when names like MSFT, CRM, VEEV will rebound given widespread fear that AI will eventually displace software entirely.
Thesis: The AI-disruption narrative is now entrenched, and the only catalyst for a SaaS rebound would be a government ban on AI (e.g., a Terminator scenario) — a view the author treats as unlikely.
Quality assessment: Speculative opinion piece, not a data-driven DD. The author admits limited sector expertise and relies on generalized sentiment rather than fundamental analysis.
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I'm not directly invested in any SaaS stocks.
I'm mostly in financials (insurance) and some staples. Google is my only tech stock.
Given you SaaS guys and gals have overtaken this sub, I'm curious when you expect companies like MSFT, CRM, VEEV, etc., to actually rebound?
I'm not an expert on the sector, so my view is similar to widespread sentiment right now that software is a depressed sector due to concerns of AI obsolescence of these companies, and that this view will never change now that it has set in.
At some point in the future AI will displace software. It may not happen for 30 years, but it will. So what could possibly change this narrative now that it is widespread?
When do you actually think these SaaS companies' stock will go back up?
The only light at the end of the tunnel for SaaS I can envision is a Terminator like scenario where AI starts killing people and governments are forced to ban/destroy AI. Then SaaS would rebound and you could cash in.
Is this what you're waiting for? Governments to step in and ban AI?
Top comment explicitly recommends buying MSFT, NOW, SAP and holding for 1–2 years for happiness (i.e., positive returns). Multiple other comments reinforce that AI benefits incumbent software firms. Current SaaS selloff is driven by AI fear and private credit contagion, not fundamentals. Incumbents like MSFT have the resources and customer relationships to integrate AI and expand margins. Long MSFT as a high-quality incumbent that will monetize AI rather than be disrupted. The market is pricing in a worst-case scenario that is unlikely to materialize. If AI evolves to a point where enterprise clients switch to pure-AI-native platforms, or if a deep recession hits enterprise software spending, MSFT could underperform.
SAP is the third name in the top comment’s “buy and close the app” recommendation. SAP’s legacy ERP moat is massive, and its cloud transition (S/4HANA, Business AI) is picking up. The market underestimates how sticky enterprise ERP systems are. Long SAP as a beneficiary of AI-driven business process optimization, with a strong recurring revenue base and global footprint. Slow cloud migration pace, currency headwinds, or regulatory issues in Europe.
ServiceNow (NOW) is explicitly named alongside MSFT and SAP in the top comment’s “buy and hold” advice. NOW is a workflow automation leader; AI will enhance its platform (e.g., AI-powered ITSM), not replace it. The selloff creates a valuation entry point. Long NOW as a pure-play SaaS that is already embedding generative AI into its products, likely to see accelerating adoption. Competition from Microsoft and Salesforce in the workflow space; macro slowdown delaying IT spending.
This Reddit post, published June 19, 2026,
features u/Alicyclobacillus
discussing MSFT, SAP, NOW.
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