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Why software stocks are getting pummelled

economist.com

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Re: Why software stocks are getting pummelled

#151

Post by deadbabe »

coliveira wrote: post #99
kube-system wrote: post #63

Earlier quoted context omitted.

Open source doesn't implement, host, and support itself. Some of these software companies stocks are companies selling open source software.

Software developers programmed themselves out of a job. They created a huge and growing set of free, tested, high quality software in the form of open source, that can be use for pretty much anything. LLMs will automate a lot of the remaining pieces.

Programming yourself out of a job, is the final, most important command of a job.

Re: Why software stocks are getting pummelled

#152

Post by keithnz »

Other than smaller SaaS companies who offer things easily replaceable, I don't think many of the bigger ones can be replaced by AI, if anything, it might make them better. For instance I can't see us replacing our ticket management/support software, hosting, manufacturing/sales/stock software, accounting software, etc but it would be great if we could leverage all those tools better via AI (some are already easy to leverage).

The interesting thing I've noticed is software library authors could take a beating though. Quite a few libs in the .NET world have gone down the monetized paths, for all of the ones I've been using, I've just got AI to remove them and implement native solutions. But none of these are large listed companies.

Re: Why software stocks are getting pummelled

#153

Post by walkersnice »

alexpotato wrote: post #147

So one thing that hasn't changed is that the marginal cost of software is still effectively zero. That's where most of the money was being made b/c if you were a monopoly or oligopoly that each additional unit sold was an absolute increase in revenue and you spread out your fixed costs. What has changed most dramatically is the "fixed" cost of writing the software to begin with. Given that the costs were being spread…

I think the idea is that SAP/ServiceNow will be subject to more competition, if/when software is cheaper to write.

Their lead has shrunk, and thus so has their value.

Re: Why software stocks are getting pummelled

#154

Post by walkersnice »

falloutx wrote: post #81
SimianSci wrote: post #50

The Value of software is going down, this much is clear to most people. It will continue to demand proper engineering for its creation and operation. But AI will lead to an increase of unique one-of-a-kind systems created by very small teams. And the world will increasingly rely on these unique systems. SaaS companies need to start reading the writting on the wall, their massive valuations enjoyed when software was h…

Everyone says that but I don't see anyone cooking up the next photoshop and selling it at $3/month. Why are we not seeing more options of every tool? Most Saas companies are sales companies at their core rather than software companies. And those sales people are so good that they can sell a todo list for millions.

> Everyone says that but I don't see anyone cooking up the next photoshop and selling it at $3/month. Why are we not seeing more options of every tool?

I expect the markets are reflecting that soon there will be more competition.

It'll take time, and as LLMs improve, it'll take even less time.

Re: Why software stocks are getting pummelled

#156

Post by zamadatix »

jeroenhd wrote: post #145
poulpy123 wrote: post #12

Maybe just maybe, the markets are not as rational as these people think they are

Reminds me of that time when Nintendo's stock exploded after the launch of Pokemon go, only for traders to discover a few hours later that Niantic actually owned the game and correct the situation.

Nintendo is one of the three 1/3 owners in The Pokemon Company and an early investor in Niantic. I'd be curious how much was actually confusion as to who is making money vs just a normal hype cycle. I'd also be curious how much the game itself made the various owners vs what Nintendo made on the general interest in other Pokemon games/merchandise from the launch.

At the very least, the stock looks to have shot up for most of the launch month with the peak not occuring until July 18th and the stock still being significantly higher at the end of the month https://finance.yahoo.com/quote/NTDOY/history/?period1=14673...

I think the funniest bit of pure confusions was "Zoom Technologies (ZOOM)" being mistaken for "Zoom Video (ZM)" at the start of the pandemic to the point the SEC halted its trading on concerns around the confusion being the only reasonable driver. https://markets.businessinsider.com/news/stocks/zoom-technol...

Re: Why software stocks are getting pummelled

#157

Post by esafak »

kulor wrote: post #134
coliveira wrote: post #103

Earlier quoted context omitted.

In the case of Photoshop it is the software itself that is becoming useless. In a few years, using photoshop will be viewed the same as developing physical film, a process from a by-gone era that is still possible, but impractical.

I've recently re-instated a Photoshop subscription and its now part of my core AI generated asset workflow. AI is fantastic at art direction but it needs minor adjustments to make it production ready. E.g putting real screenshots in with correct placement, smoothing, editing out artefacts etc. I can't imagine the lengths I'd have to go to to instruct an LLM to do these tasks with words.

Some of the LLM crowd is living in lala land.

Re: Why software stocks are getting pummelled

#158

Post by aunty_helen »

lateforwork wrote: post #6

> 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.

Hyper custom software can allow your business flows to sync together a lot better than the alternative, using zapier to glue a bunch of mostly poor fits and ending up with Frankenstein processes.

Also, it allows you to pick and choose what you want from where.

We’ve just completed the first month of our internal CRM that has replaced about 500$ a month in subs with something that flows much better and enforces our own internal processes.

Re: Why software stocks are getting pummelled

#159

Post by h4kunamata »

Investors do not understand how coding works.

Google "Project Genie" which allegedly can take your input and the AI will make it rain, drove investors into panic mode. They think that you can create GTA6 like that.

It was the perfect storm: clueless investors + the whole AI bubble already bursting if you are following non-biased news.

Re: Why software stocks are getting pummelled

#160

Post by iamacyborg »

ManuelKiessling wrote: post #113
solomatov wrote: post #106

Earlier quoted context omitted.

>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: https://dx-tooling.org/sitebuilder/ https://github.com/dx-tooling/sitebuilder…

I’m not sure the world needed yet another CMS
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