Key insights
- The author expresses concern over the recent parabolic rise in SaaS stocks, suggesting they are becoming overbought despite underlying value for some names. While bullish long-term, they advise caution for those who missed the recent rally, recommending a wait for a significant pullback (50%+) before entering positions. This sentiment implies a potential near-term correction risk for the SaaS sector.
Posted about a month ago about NOW and IBMs earnings coming in strong yet the market selling off and the overreaction based on nothing.
Since then we've seen parabolic moves in both as well as many many other SaaS names in the last week. I understand people chase and expect everything to go up in a straight line... but the concern surrounding SaaS names is still very much in play.
Im longer term bullish, but word to the wise.. when the market shoots a ticker up 15-50%+ like snowflake mdb, now etc.. its time to reevaluate.
Some of these names have been sold off beyond the level they should have but now they're getting to a point they're overbought.
Value is there for some names if you have patience but if you missed the run up I would suggest waiting for a pullback. 50%+ retrace imo before entering.
Anyways, what are you guys doing? Buying selling or avoiding SaaS entirely?