Key insights
- The author believes the recent SaaS selloff following earnings from IBM and ServiceNow is an overreaction. They attribute the decline to algorithmic trading and minor concerns being magnified. The author suggests a double bottom is forming and recommends holding strong SaaS stocks like CRM, NOW, MDB, and ADBE, anticipating future rewards as AI's impact is overstated in the short term.
This SaaS selloff from decent double beats via IBM and NOW gave the algos what they needed to sell..
What was it exactly? Simply put, nothing. Both had solid earnings, with very very minor concerns..
While those were magnified heavily to "justify" this sell off.. there really isnt anything to worry about.
What's happening is a double bottom. This is prob needed to shake out anyone who has weak hands. Ai infrastructure is the current hot trade ya know.
Will AI eat some of these companies lunches? Sure.. but this wont happen anytime soon. Considering the latest version of claude is a slow pos and all of them hallucinating..
The LLM and ai bots aren't reliable. The tech isnt capable without some major revolution. Even in tbe case the agentic bots do most of the work.. these companies will benefit as theyll just adjust their sales model from per seats to consumption.
This is just a overreaction as per usual. Wallstreet gets it wrong all the time. Some of these stocks are like buying Meta at 90 bucks a few years ago, google last year.. etc
Anyway, dont fret. Hold the stronger ones and youll be handsomely rewarded. CRM, NOW, MDB, ADBE etc..
What do you think? Buying any today?