amit
2026.04.09 18:42

This is all of software today.

It's ugly, but once again it is rooted in a very programmed (literally, algorithmically programmed) belief that the markets have about software in the age of AI.

Once again, if the market believes Claude will destroy every software company, then the amount of compute we need should be 1000x what it is today. $NVIDIA(NVDA.US), $AMD(AMD.US), $Broadcom(AVGO.US), and other chip names should not be trading at the multiples they are at.

If the market doesn't actually believe AI will completely ruin software, then the discounts on the software are probably too extreme. Not to say that they need to return to the highs from years ago because there obviously has been a shift, but to ruthlessly take down all of software seems to be aggressive.

I wouldn't be long $IGV but I would try to identify the best software names that are being unnecessarily treated as legacy IT with no future. Obviously, I don't think $Palantir Tech(PLTR.US) deserves this type of treatment given how it has differentiated itself from every other software company. I also don't think $CrowdStrike(CRWD.US) or $Palo Alto Networks(PANW.US) deserve to get wrecked when AI will only create a deeper need for cybersecurity.

I also don't think $Oracle(ORCL.US), which has $300B in RPO from OpenAI, just did 30K layoffs, and down more than 50% from the highs deserves to be getting hit this hard, especially when other neoclouds (one could argue that Oracle is the ultimate neocloud) are being seen positively from the market. But because Oracle has a software part to the business...it gets sold off.

It's a stock pickers market in software but you just have to be able to try to find the names that aren't destroyed because of AI but rather only will accelerate earnings growth because of AI.

Source: amit

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