I Ranked Nearly 20 SaaS Stocks To See Who'd Survive

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~1.0 min read

The speaker, an experienced tech investor, addresses the current downturn in SaaS stocks, attributing it to the "AI apocalypse." He categorizes SaaS companies into four groups based on AI impact and valuation: 1. **Fragile:** Companies facing an existential threat from AI, often probabilistic tools where 100% accuracy isn't guaranteed (e.g., Asana, Atlassian, HubSpot, Adobe). Some, like Adobe, have attractive valuations despite the risk. 2. **Wild Cards:** Companies with uncertain AI futures (e.g., Zoom, Salesforce, Toast, Duolingo). Salesforce has a data moat, but new AI-native providers could emerge. Duolingo is cheap, but AI could offer alternative language learning. 3. **Robust:** Companies that should be fine, often deterministic systems of record where AI integrates but doesn't replace core functions requiring high accuracy (e.g., ServiceNow, Snowflake, Data Dog, Shopify, Veeva, Crowdstrike, MongoDB). 4. **Anti-fragile:** A small group almost guaranteed to get stronger from AI chaos (not detailed in this segment). The speaker provides a valuation analysis (1-7 scale) for each, noting some current attractive valuations amidst the market turbulence.

Opinions

TEAM (stock, NASDAQ)

The valuation is considered attractive right now, although the company is in the 'fragile' category due to AI disruption.

HUBS (stock, NYSE)

The valuation is described as 'extremely attractive', but the company is categorized as 'fragile' due to the threat from AI.

CRM (stock, NYSE)

The valuation is attractive if the company can navigate the AI transition, but it faces significant risks from AI-native competitors and the speaker is 'thinking twice' about owning it.

ASAN (stock, NYSE)

Considered fairly valued (rated a 'four' on the speaker's scale) and not cheap, despite its price fall. It is categorized as a 'fragile' company facing threats from AI.

MNDY (stock, NASDAQ)

The valuation is described as 'extremely attractive', but the company is categorized as 'fragile' due to the threat from AI.

ADBE (stock, NASDAQ)

The valuation is considered very attractive, but this is balanced by the company facing a significant 'existential threat' from AI.

ZM (stock, NASDAQ)

The speaker does not think Zoom is a 'pretty good deal' at its current price, noting the valuation has been driven by investments rather than the core business.

Topics

Impact of AI on SaaS Stocks (SAS Apocalypse)

Framework for Analyzing SaaS Stocks

Valuation Methodology for Stocks

Deterministic vs. Probabilistic SaaS Companies

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