Claude Code · OpenAI · Claude · Codex · Wall Street · CNBC Technology
‘SaaSpocalypse’ debate intensifies as software stocks swing wildly
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The "SaaSpocalypse" was raging this week.
Key facts
- The iShares Expanded Tech-Software Sector ETF plummeted 24% in the first quarter, its worst performance since 2008
- Bending Spoons, which held its own IPO in July, owns brands including AOL, Evernote and Vimeo, and now has a market cap of $28 billion
- Datadog, which sells monitoring software, also sank 19% on Thursday, the steepest slump since its IPO in 2019
- Salesforce has lost more than 40% of its value since the end of 2024 despite accelerating revenue growth and consistent margins
Summary
The pennies-on-the-dollar acquisition of one-time highflyer Airtable, followed by plunges in HubSpot, Datadog and Figma on earnings reports, all served to underscore investor concerns that artificial intelligence models are eating away at the value of costly software products. "I do think that companies are going to continue to use these coding agents to build functionality to maybe act as a little bit of pressure on renewals," said Matt Hedberg, a software analyst at RBC Capital Markets. But by the end of the week, Wall Street was reminded that there's still juice left in an industry that, not long ago, was viewed as driving innovation and was trading at hefty market multiples. Twilio, a provider of cloud-based communications software, and Atlassian, which sells collaboration tools, each saw pops of well over 20% on Friday after reporting quarterly results.