February 5, 2026
By Peter Bower
Software as a Service companies have been crashing the stock market since last week. Investors fear that artificial intelligence-derived self-made models can supplant many software programs with cheaper versions. Relatively unsophisticated users can create tailored applications to meet the needs that expensive software packages have been providing. Suddenly, the business models of companies such as Microsoft, Intuit, Shopify, and many others do not look safe.
Is this a realistic fear? Probably not. There may be some relatively simple applications that self-made models can work. But many software packages need to have fail-safe protection, audit potential, interoperability with other applications, security of data features, and many other features that will simply not be able to be built by someone using the programming features of an AI model. It seems these fears are exaggerated.
There may be more to the sell-off in SaaS names than simply cheaper competition. Many of these companies’ stocks have had huge gains. They have been rising for years. Any catalyst that prompts a selling panic rapidly gathers pace as other holders want to protect profits. Selling begets selling. Logic flies out the window.
The reality is that the service that these companies provide cannot be so easily replaced. Investors will catch on. In the meantime, bargains are being provided to intrepid investors who are willing to look through the present volatility. Tech sell-offs like this have happened many times in the past. This will pass, stay steady my friends.
-The Lonely Bull
