America’s SaaSpocalypse Phase is Crushing Software Stocks. Is This a Buy-the-Dip Moment?
Silicon Valley’s golden child is learning what it feels like to be the black sheep. After a 2024 spending rush that pushed global software spend past $1.2T, software stocks are getting absolutely demolished amid fears that AI will make traditional software companies redundant.
AI eats the stack: The recent selloff that knocked billions off enterprise software stocks may still be premature. While the Wall Street Journal says some companies are slowing AI software buying, the spending is moving toward the disruptors. Platforms like Anthropic’s Claude and OpenAI’s enterprise ChatGPT are moving deeper into workflow automation, challenging legacy software providers as AI becomes embedded directly into how companies operate. The “middle layer” of digital advertising is particularly vulnerable as AI can now analyze millions of data points to generate content and personalize campaigns at scale.
- Traditional automation platforms, which often rely on predefined workflows, are struggling to compete with AI, which condenses the entire process into a single prompt.
- The fear has hit stocks hard, with marketing automation names like KlaviyoKVYO, Sprout SocialSPT, and HubSpotHUBS down as much as 75% over the past year.
The Industry Is Calling A Bottom
Software stocks have fallen so far that ServiceNow’sNOW CEO has begun buying shares in his company, disclosing plans to buy $3M in shares. The buying comes after the S&P North American Software index briefly fell below 20 times forward earnings for the first time on record, far under its long-term 34x average, even after a rebound. To calm investor nerves, many private companies, including McAfee and Rocket Software, have shared their financials publicly to highlight strong growth.
- Although JPMorgan says the selloff looks overdone, Jefferies noted that 42% of its covered software names trade below historic lows.
- While it’s unclear if the pain is over, all ten S&P 500 software firms reporting this season beat profit estimates, and eight topped revenue expectations, outpacing the broader market.
The dip buyers’ dilemma: Still, some fund managers are reluctant to buy the dip. Amundi’s head of developed market strategy, Guy Stear, told Bloomberg that “The AI scare trade is largely a work in progress, and that’s why there is no rebound.” Similarly, La Financière de l’Echiquier’s fund manager isn’t going to be a buyer until he has “a good idea of who’s going to emerge as a winner in the next 12 months.” However, this SaaSocalypse isn’t the end — it’s just the shakeout set to create the next group of winners.
The AI Marketing Software Doing The Damage
If this SaaSpocalypse is a shakeout, then RAD Intel’s AI is the category killer. As legacy marketing automation platforms struggle to defend rigid workflows against prompt-driven intelligence, RAD is built natively for the AI-first era.
Since its merger, the company has scaled from a $10M valuation to $225M+, raised $60M+, secured backing from multiple Fidelity funds, and landed recurring seven-figure enterprise contracts across Fortune 1000 brands. Sales contracts have doubled year-over-year, and with a Nasdaq ticker reserved under $RADI, the company is clearly positioning for the public stage.
Its current Reg A+ round remains open at $0.85 per share — the final entry tier before a scheduled price reset that locks out today’s valuation. In a market desperately searching for the next clear AI winner, RAD’s AI is not defending the old stack: it’s replacing it. For investors looking to be early to the disruptor instead of late to the rebound, this may be the moment to act.