IBRS argues that the recent volatility in SaaS stock prices is being unfairly blamed on the “AI bogeyman,” noting that while AI-driven anxiety is real, many of the fears surrounding it are fallacies. Rather than replacing major ERP players, generative AI is expected to become the environment where these solutions live. The more substantial reasons for market instability are often overlooked: tech stocks function as long-duration assets, meaning their valuations compress whenever Treasury yields spike, as seen in late 2025. Furthermore, the perceived declines in industry giants are often more a result of emerging competitive pressures and shifting investor interest toward higher-growth stocks, while the true “invisible elephant” for the industry is the geopolitical challenge of digital sovereignty within US-based cloud infrastructures.
In the article ‘SaaSpocalypse now: Is the great software sell-off over?‘, the broader market report details a ‘SaaSpocalypse’ that wiped billions of dollars in market capitalisation from software stocks in early 2026. This mass sell-off was triggered by fears that rapid advancements in AI agents, such as tools that can interact directly with computer interfaces via natural language, will render traditional software workflows and ‘per-seat’ pricing models obsolete. While some analysts compare this shift to the disruptive downfall of legacy hardware giants, others suggest the sell-off is a ‘misread’ or a ‘doomsday scenario’ over-baked into the market. They argue that established systems of record remain essential for AI agents to function, suggesting that the future of the sector lies in ‘software with AI’ rather than a total replacement of the SaaS model.
