Portfolio under the microscope: "SaaSocalypse" — reality or overblown panic? ☁️📉

The recent sell-off in SaaS stocks has revived the "SaaSocalypse" narrative. Personally, I view the market's current reaction as markedly overblown.

Markets tend to swing between euphoria and fear — and right now sentiment is clearly on the latter side. Some concerns are valid, but a broad sell-off of quality companies often creates compelling opportunities.

At the moment, I am not changing my target prices for the main SaaS positions. However, if negative sentiment persists for another 1–2 months, I am prepared to reassess my valuations.

My current targets remain:

$NOW – 140 USD

$CRM – 300 USD

$ORCL – 240 USD

$DUOL – 280 USD

$TTD – 65 USD

Why I don’t think the "SaaSocalypse" reflects reality:

1. Strong business models SaaS companies are built on recurring revenues, high margins, and predictable cash flow. These characteristics don't vanish overnight.

2. Critical role in customers’ businesses Enterprise software is deeply integrated into company processes. Replacing it is costly, complex, and often inefficient.

3. Long-term structural trends Cloud, digitization, cybersecurity, and AI continue to support long-term demand.

Main positive factors:

- strong "stickiness" (customer dependence)

- high free cash flow generation

- scalable models

- global expansion potential

- AI as a potential growth accelerator

The strongest SaaS companies have the potential for long-term value creation.

Key risks:

- a slowdown in corporate spending

- increasing competition (including AI-native players)

- pressure on valuations and multiples

- higher customer acquisition costs

- longer sales cycles

Not all SaaS companies will survive this cycle, or will survive in the same form and quality.

I don't think the sector is collapsing — it's merely transforming. This phase typically separates genuinely strong companies from those that benefited from cheap capital and unchecked enthusiasm.

How are you navigating the current SaaS environment? Buying or reducing?

You can find the English version of this post on my eToro profile. If you'd like to follow me there or copy my USD portfolio, I'd appreciate it!