If companies, as @lucasm wrote, can leverage AI, implement it into their products and then monetize it, they will profit significantly. The start of this year has unfortunately been quite merciless for these stocks.
But I think this offers investors a lot of opportunities. If you manage to buy a solid company, over the course of several years its shares could be tens of percent higher thanks to the current declines.
I have a fairly large position in TTD, and it’s true it doesn’t look great right now, but they can still turn it around and hopefully they’ll start doing something about it.
In CRM’s case I don’t even look for rationality. The results are top and the outlook is the same. From what I saw, the market was possibly disappointed that the outlook was basically what was expected (it’s simply not better—the market keeps wanting more and more). We’ll probably have to get used to this: good isn’t good enough. The market wants to see a positive explosion every quarter.
In recent weeks, software/cloud stocks have generally taken a hit because the market is dealing with two things at once: weaker willingness from companies to increase IT budgets and an “AI reset” in how software will be sold and valued. According to reports from recent weeks, AI can eat into some of the “seats” (licenses) — and the market fears that kind of cannibalization. When an AI agent does the work of two people, a company may over time need fewer CRM users. For the traditional “per-user” model this is a structural nightmare. On the other hand, established players actually have the advantage of data and distribution, so I don’t see it as bleakly as the market does. Simply put — AI won’t damage the business if established companies deploy and monetize it well.
If companies, as @lucasm wrote, can leverage AI, implement it into their products and then monetize it, they will profit significantly. The start of this year has unfortunately been quite merciless for these stocks.
But I think this offers investors a lot of opportunities. If you manage to buy a solid company, over the course of several years its shares could be tens of percent higher thanks to the current declines.
I have a fairly large position in TTD, and it’s true it doesn’t look great right now, but they can still turn it around and hopefully they’ll start doing something about it.
In CRM’s case I don’t even look for rationality. The results are top and the outlook is the same. From what I saw, the market was possibly disappointed that the outlook was basically what was expected (it’s simply not better—the market keeps wanting more and more). We’ll probably have to get used to this: good isn’t good enough. The market wants to see a positive explosion every quarter.
In recent weeks, software/cloud stocks have generally taken a hit because the market is dealing with two things at once: weaker willingness from companies to increase IT budgets and an “AI reset” in how software will be sold and valued. According to reports from recent weeks, AI can eat into some of the “seats” (licenses) — and the market fears that kind of cannibalization. When an AI agent does the work of two people, a company may over time need fewer CRM users. For the traditional “per-user” model this is a structural nightmare. On the other hand, established players actually have the advantage of data and distribution, so I don’t see it as bleakly as the market does. Simply put — AI won’t damage the business if established companies deploy and monetize it well.