investors are panicking.
however those system of record apps - will outlast most "A.I" companies - since the effective data is within their systems
Why software stocks are getting pummelled
111–120 of 285 posts
Re: Why software stocks are getting pummelled
#112The iShares Expanded Tech-Software Sector ETF (IGV) seems to backup what the article is saying. It isolate software firms from the IT industry. It is down about 10% last week, and 20% down the past six months. The IT sector as a whole didn't lose much.
I used to work for ServiceNow.
Market Cap over doubled between 2021 and 2025.
But since the start of 2025, it has lost all of that.
13% in the last week. 20% in the last month. Six months is definitely bleaker than those numbers, 37% down.
Re: Why software stocks are getting pummelled
#113Earlier quoted context omitted.
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…
>But it does reduced by an order of magnitude the amount of money you need to spend on programming a solution that would work better Could you share any data on this? Are there any case studies you could reference or at least personal experience? One order of magnitude is 10x improvement in cost, right?
I‘m not sure it’s a perfect example, but at least it’s a very realistic example from a company that really doesn’t have time and energy for hype or fluff:
We are currently sunsetting our use of Webflow for content management and hosting, and are replacing it with our own solution which Cursor & Claude Opus helped us build in around 10 days:
Re: Why software stocks are getting pummelled
#114Earlier quoted context omitted.
Our company just went through an ERP transition and AI of all kinds was 0% helpful for the same reason it’s difficult for humans to execute: little to no documentation and data model mismatches.
surprising considering you just listed two primary use cases (exploring codebases/data models + creating documentation)
I don't find this surprising. Code and data models encode the results of accumulated business decisions, but nothing about the decision making process or rationale. Most of the time, this information is stored only in people's heads, so any automated tool is necessary blind.
Re: Why software stocks are getting pummelled
#115> 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.
Foundational software requires that, but the foundation is pretty much completely built at this point. The workforce required to keep it running is but a tiny fraction of what was required to build it. The past has shown that innovation in hardware can push for the foundations to be rebuilt, but we've also already got computers basically everywhere now. There may not be some new innovation that requires the foundatio…
Such black and white thinking. Even the little tools fall apart at first sight of an edge case if they are fully vibed. Neither Opus nor codex are good at architecture, and it’s not clear they ever will be.
Re: Why software stocks are getting pummelled
#116> 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.
Atlassian tools for a client like mine (hundreds of employees) can easily cover the expense of internalizing it. It's Jira plus confluence mostly, it's not rocket science. And that's just atlassian. Start adding stuff that costs many many many yearly salaries (special software for managing inventories and warehouses) it starts making sense to prototype alternatives internally. I came to the conclusion that if it's no…
I told to my colleague that it would take less time for me to vibe code jira that it would take him to configure it. Sounds crazy ? Not so much : factor the part of jira you use (maybe 10%), the many choices and dimensions you have to configure, the time it take and the complexity it bring. On the other side, the vibe code version have only the fields you want, most of the logic hard written in code (ie epic > story >task...), and that you could do anything any role, any authentication scheme.
Re: Why software stocks are getting pummelled
#117Earlier quoted context omitted.
Our company just went through an ERP transition and AI of all kinds was 0% helpful for the same reason it’s difficult for humans to execute: little to no documentation and data model mismatches.
surprising considering you just listed two primary use cases (exploring codebases/data models + creating documentation)
Exploring a codebase tells you WHAT it's doing, but not WHY. In older codebases you'll often find weird sections of code that solved a problem that may or may not still exist. Like maybe there was an import process that always left three carriage returns at the end of each record, so now you got some funky "lets remove up to three carriage returns" function that probably isn't needed. But are you 100% sure it's not needed?
Same story with data models, let's say you have the same data (customer contact details) in slightly different formats in 5 different data models. Which one is correct? Why are the others different?
Ultimately someone has to solve this mystery and that often means pulling people together from different parts of the business, so they can eventually reach consensus on how to move forward.
Re: Why software stocks are getting pummelled
#118> 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.
Haha, maybe… you can stick your head in the sand all you want, but everyone I know whose output is code is delegating 100% of their work to Claude Code today, I cannot see this magically drawing a line at people whose output is configs and emails…
Re: Why software stocks are getting pummelled
#119[deleted]
Re: Why software stocks are getting pummelled
#120Earlier 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…
you are aware of the long history of organizations being absolutely screwed by bad erp implementations right? nike's 2001 issue, the horrific birmingham oracle implementation, avon, etc.