Software stocks are being mispriced, Anish Acha...
I think the markets are oversold software, absolutely oversold. Nobody is going to vibe code their payroll. And if you look at enterprise spend on software, it's 10% of overall spend. So even if they were to vibe code some of their enterprise SaaS, the stakes of doing it are just not that consequential. I think the second point to pay attention to, Karen, is that 75% of public SaaS names have raised prices since ChatGPT was released. To me, that does not sound like an industry that's under threat of commoditization. So two points, not going to be disrupted and the margins are not going to be hurt. To your first point about not being disrupted, why not vibe code your way to a better enterprise solution that is AI native? Look, I do believe that these companies are going to take this innovation bazooka. They're going to point it at their core strategic offering. They're not going to use it to replace payroll, to replace ERP, to replace CRM. That's just a sort of high downside, low upside effort. Whereas if you take what you do today and use AI to make it that much better, you can raise prices for your products and drive more top line versus focusing on bottom line.
Summary
Anish Acharya argues that software stocks are undervalued. He highlights the resilience of the SaaS sector and the potential for AI to enhance existing products rather than disrupt them.
Key Points
- Software stocks are currently oversold in the market.
- Enterprise software spending is only 10% of overall budgets.
- 75% of public SaaS companies have raised prices since ChatGPT's release.
- The software industry is not facing commoditization threats.
- Companies will enhance existing solutions with AI rather than replace them.
Tags
Repurpose Ideas
- LinkedIn post: Why software stocks are undervalued.
- Tweet: 3 reasons SaaS is not facing commoditization.
- Checklist: How to enhance products with AI.
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