the crash is indiscriminate, which is really disheartening. even infra software is getting demolished, no llm is going to replace something like mongodb, but it's all traded under the same umbrella.
Why software stocks are getting pummelled
61–70 of 285 posts
Re: Why software stocks are getting pummelled
#62> The fear is that these [AI] tools are allowing companies to create much of the software they need themselves. AI-generated code still requires software engineers to build, test, debug, deploy, secure, monitor, be on-call, support, handle incidents, and so on. That's very expensive. It is much cheaper to pay a small monthly fee to a SaaS company.
A lot of these companies are not small monthly fees. And if you’ve ever worked with them, you’ll know that many of the tools they sell are an exact match for almost nobody’s needs. So what happens is a corporation ends up spending a lot of money for a square tool that they have to hammer into a circle hole. They do it because the alternative is worse. AI coding does not allow you to build anything even mildly complex…
If it is not a small fee, I do wonder - is there still advantage to having a provider which one may take out a lawsuit against if something goes wrong? To what extent might liability and security vetting by scaled usage still hedge against AI, in your view?
Re: Why software stocks are getting pummelled
#63> The fear is that these [AI] tools are allowing companies to create much of the software they need themselves. AI-generated code still requires software engineers to build, test, debug, deploy, secure, monitor, be on-call, support, handle incidents, and so on. That's very expensive. It is much cheaper to pay a small monthly fee to a SaaS company.
You can use AI for simple stuff. For everything else, there’s open source.
Open source doesn't implement, host, and support itself. Some of these software companies stocks are companies selling open source software.
Re: Why software stocks are getting pummelled
#64Meanwhile, in the real world, as a software developer who uses every possible AI coding agent I can get my hands on, I still have to watch it like a hawk. The problem is one of trust. There are some things it does well, but its often times impossible to tell when it will make some mistake. So you have to treat every piece of code produced as suspect and with skepticism. If I could have automated my job by now and bee…
I've been coming around to the view that the time spent code-reviewing LLM output is better spent creating evaluation/testing rigs for the product you are building. If you're able to highlight errors in tests (unit, e2e, etc.) and send the detailed error back to the LLM, it will generally do a pretty good job of correcting itself. Its a hill-climbing system, you just have to build the hill.
Re: Why software stocks are getting pummelled
#65QQQ is up 20% over the last year. GOOG is up 70% over the last year. "Pummelled" seems extremely sensational...
You didn't read the article. The first graph plots Workday, Salesforce, SAP, and ServiceNow. Google isn't mentioned.
Maybe they shouldve said ERP stocks are getting "pummelled"
Re: Why software stocks are getting pummelled
#66Earlier quoted context omitted.
Was the hard part ever really the software, though? It's the Service part of SaaS that seems to provide the moat. Lock-in, habits, workflows, integrations, and trust. And don't discount the appeal of making some part of your operations "someone else's problem." Could you hire engineers or use an LLM to make your own Google Docs? Probably, yeah, but would that be worth the headache of being responsible for a bespoke i…
The article is about SAP, Salesforce, etc. Making your own Google Docs is stupid unless your company's core business is document management. OTOH Replacing SAP with a bespoke system will make a lot of sense for many companies. SAP is already the worst of both worlds. It'll have been highly customized for your flow so you've got all of the headaches of bespoke software and all of the headaches of SaaS. And unlike Goog…
what do you mean SAP? like the ERP system?
I would absolutely NEVER steal or rewrite that. So much finanical stuff is baked into the business logic that impacts finance, regulations, hr, etc.
No do not roll your own ERP core.
Roll everything else
Re: Why software stocks are getting pummelled
#67> The fear is that these [AI] tools are allowing companies to create much of the software they need themselves. AI-generated code still requires software engineers to build, test, debug, deploy, secure, monitor, be on-call, support, handle incidents, and so on. That's very expensive. It is much cheaper to pay a small monthly fee to a SaaS company.
Other reason could be that investors think companies are going to lay off a lot of their staff and then that will decrease Saas revenue anyway.
Re: Why software stocks are getting pummelled
#68> The fear is that these [AI] tools are allowing companies to create much of the software they need themselves. AI-generated code still requires software engineers to build, test, debug, deploy, secure, monitor, be on-call, support, handle incidents, and so on. That's very expensive. It is much cheaper to pay a small monthly fee to a SaaS company.
Hmm, I wonder if it would be cheaper to hire a couple of software engineers to vibe-code custom SaaS apps on top of the company's existing data layer instead of paying for a hundred different SaaS subscriptions. Financial considerations aside, one advantage of having in-house engineers is that you can get custom features built on-demand without having to be blocked on the roadmap of a SaaS company juggling feature re…
I'm at a large company that is building connections between all of its different financial systems. The primary problem being faced is NOT speed to code things, the primary problem at large companies is getting business aligned with tech (communication) and getting alignment across all the different orgs on data ownership, access, and security. AI currently doesn't solve any of this. Throw in needing to deal with regulation/SOX compliance and all the progress you think AI might make, just doesn't align with the problem domains.
Re: Why software stocks are getting pummelled
#69What an odd article that is just designed to hype the software creation aspect, which doesn't really affect MAGAF. MSFT went down because of overexposure in AI and because it is clear that people do not want it. AI weariness is a thing, and if people go off the Internet or advertisers question whether humans or AI swarms are "watching" their ads it is over for the big players. Trying to salvage the situation by hypin…
Yeah the article doesn't make a lot of sense to me. Guess whose writing software with AI? Software companies.
They mention sites like Base44 and Lovable. Sure, if tons of business was rotating out of software into no code AI solutions the article would have a point. But has a large portion of market cap moved out of AI into a few little no-code startups? Is Salesforce, Service Now, and SAP being replaced with no code applications? No. Absolutely not. These are small, niche companies. It does not explain a large downward movement in an entire industry.
Re: Why software stocks are getting pummelled
#70This article crystallizes something I witnessed firsthand last week. Overheard a guy at a restaurant explaining how he builds phone apps with AI and no coding experience. When asked how he verifies the code works, he said he pastes it into a different AI to explain it. That's the "slopware" problem in action. The code compiles. It might even work. But there's no understanding of what it's actually doing, no ability t…
Thats fine Ill charge him 500 bucks an hour to fix it if it has success and he runs into not being able to maintain it