Long APIs, Short Slides

Alexander Campbell · Campbell Ramble · February 08, 2026 at 15:57 · ⏱ 20 min read  | Read on Substack ↗
Summary
The market is mistakenly selling all software stocks as a monolith. AI replaces human labor (road workers) but increases consumption of API-based infrastructure (tollbooths). The author recommends going long infrastructure tollbooths (Cloudflare, MongoDB, Okta, etc.) and short IT outsourcers (Capgemini, Cognizant, Infosys) as a pair trade, expecting revenue decay at the services firms and volume growth at the API layer over 12-24 months.
  • Software is bifurcated: human-UI SaaS (e.g., Salesforce, Monday.com) is threatened by AI, while API-based infrastructure (e.g., MongoDB, Datadog) benefits because AI agents generate hundreds of API calls per minute versus a human's dozen per hour.
  • IGV (iShares Expanded Tech-Software ETF) is down 30% from highs but is a bad proxy because it holds both threatened human-UI names and benefiting infrastructure names.
  • IT services companies (Capgemini, Cognizant, Infosys, Wipro) rely on labor arbitrage; AI eliminates the need for human labor, making their per-hour billing model obsolete.
  • India's Big 4 IT firms have stopped hiring: TCS cut 11,000 people in one quarter; the industry's revenue growth is now low single digits versus 15-20% historically.
  • Capgemini is the highest conviction short due to net debt of ~€3.7 billion, which limits buyback defense; Morgan Stanley downgraded to Underweight.
  • Infosys has a fortress balance sheet ($2B net cash) but consensus expects +7.9% revenue growth in FY2027, which the author believes will be cut repeatedly.
  • The pair trade requires roughly 2x short delta vs long delta to neutralize volatility, as the long basket is nearly twice as volatile as the short basket.
  • The trade is a slow bleed over 12-24 months due to multi-year enterprise contracts and high switching costs; not a blow-up trade.
Read time 20 min
Length 20,782 chars
Category finance
Trade Ideas
Alexander Campbell Founder & CEO, Rose AI; ex-macro investor, Bridgewater
AI agents need to send notifications (SMS, email, push); Twilio charges per API call and sees increased usage.
Alexander Campbell Founder & CEO, Rose AI; ex-macro investor, Bridgewater
AI agents generate massive logs and monitoring data; Datadog charges per event and benefits from bot-scale observability.
Alexander Campbell Founder & CEO, Rose AI; ex-macro investor, Bridgewater
AI agents require real-time event streaming; Confluent charges per event and is a core part of the bot infrastructure layer.
Alexander Campbell Founder & CEO, Rose AI; ex-macro investor, Bridgewater
AI agents generate more code commits; GitLab charges per seat and sees increased usage as automation accelerates.
Alexander Campbell Founder & CEO, Rose AI; ex-macro investor, Bridgewater
ServiceNow is listed as a Type 1 human-UI software (dashboard/CRM) that faces compression as AI agents replace human project managers and support reps. Seat-based revenue is at risk.
ServiceNow is listed as a Type 1 human-UI software (dashboard/CRM) that faces compression as AI agents replace human project managers and support reps. Seat-based revenue is at risk. Risk: ServiceNow has strong enterprise relationships and could transition to automation, but the structural headwind remains.
Alexander Campbell Founder & CEO, Rose AI; ex-macro investor, Bridgewater
AI agents constantly query databases; MongoDB charges per query and is a key tollbooth in the bot stack.
Alexander Campbell Founder & CEO, Rose AI; ex-macro investor, Bridgewater
Infosys is the largest pure-play Indian outsourcer; 85% revenue from renewals, but AI will erode headcount-based contracts. Consensus expects reacceleration, which the author fades.
Alexander Campbell Founder & CEO, Rose AI; ex-macro investor, Bridgewater
AI agents generate hundreds of API calls per minute, increasing consumption of Cloudflare's edge services, which charge per call.
Alexander Campbell Founder & CEO, Rose AI; ex-macro investor, Bridgewater
Every AI agent needs authentication on every request; Okta benefits from the surge in machine-to-machine auth calls.
Alexander Campbell Founder & CEO, Rose AI; ex-macro investor, Bridgewater
AI agents search documents and logs; Elastic charges per query and sees increased consumption from automated workflows.
Alexander Campbell Founder & CEO, Rose AI; ex-macro investor, Bridgewater
More AI agents expand the cybersecurity surface; CrowdStrike benefits from increased endpoint protection needs.
Alexander Campbell Founder & CEO, Rose AI; ex-macro investor, Bridgewater
AI agents query data warehouses constantly; Snowflake charges per query and is a key tollbooth for data consumption.
Alexander Campbell Founder & CEO, Rose AI; ex-macro investor, Bridgewater
Cognizant is a U.S.-listed IT services firm with a slow-bleed revenue profile; AI disrupts its labor-based model, and consensus estimates are too optimistic.
Alexander Campbell Founder & CEO, Rose AI; ex-macro investor, Bridgewater
Capgemini is a pure commercial IT outsourcer with 350k+ employees and net debt; AI replaces the labor arbitrage model, leading to revenue decay over 12-24 months.
Alexander Campbell Founder & CEO, Rose AI; ex-macro investor, Bridgewater
The article explicitly says 'Don’t buy IGV as a proxy' because its top holdings include Salesforce, Adobe, Oracle, and Intuit — exactly the human-UI SaaS being disrupted. Buying IGV means going long t
The article explicitly says 'Don’t buy IGV as a proxy' because its top holdings include Salesforce, Adobe, Oracle, and Intuit — exactly the human-UI SaaS being disrupted. Buying IGV means going long the names the author is avoiding. Risk: If the market continues to lump all software together, IGV could underperform the pure infrastructure basket significantly.
Alexander Campbell Founder & CEO, Rose AI; ex-macro investor, Bridgewater
Salesforce is named as a Type 1 human-UI SaaS company threatened by AI: 'If an AI agent does the work, you don’t need a seat license for the human who used to do it.' The market is right to sell these
Salesforce is named as a Type 1 human-UI SaaS company threatened by AI: 'If an AI agent does the work, you don’t need a seat license for the human who used to do it.' The market is right to sell these, according to the author. Risk: Salesforce may pivot to AI features or usage-based pricing to offset seat loss; execution risk is high.

This newsletter, published February 08, 2026, features Alexander Campbell discussing TWLO, DDOG, CFLT, GTLB, NOW, MDB, INFY, NET, OKTA, ESTC, CRWD, SNOW, CTSH, CAP.PA, IGV, CRM. 16 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Alexander Campbell  · Tickers: TWLO, DDOG, CFLT, GTLB, NOW, MDB, INFY, NET, OKTA, ESTC, CRWD, SNOW, CTSH, CAP.PA, IGV, CRM