All are talking about SaaS lately which I am dipping every week more and more.
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My thesis
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1. AI agent won't kill SaaS but strengthen them
2. Some SaaS firms like MSFT will need more time to recover.
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My reasoning
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1. Look at Google play. You can find all the apps made and released by all the people.
AI enables that just faster.
Meaning, more garbage AI produced results without deep reasoning or thoughts on consumers will be rolling out. I find it even harder to think they can product SAP, MSFT,ServiceNow,ADBE type of application with SUPER VIBE CODING
People can do more easily and fast with AI coding. Yes. But who can make SAP system ? I still don't see. Who can VIBE code ADBE?? I dont see.
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2. Some of SaaS firms are growing steady with revenue and earnings. So sign of falling out. But this Mr. Market just smashing the door open with 40% dip offer. Crazy
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3. Some has indeed problem. Such as Meta Google Msft Amzn. Why? Because, value investing father Buffet also tells importance of free cash flow.
And due to investment heavily going on, all are decreasing with FCF even though their EPS REVENUE EARINGS are growing.
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I see it ending in two years. Then what happen? Profit and expanded profit stays.
And FCF comes back jumping up.
Then? We see truly healthy value investing basis stocks of M7 SaaS. I personally tested and at best MSFT goes up 1300\~1500 as FCF goes high to 250\~300 by year 2030.
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If you think I am wrong, I will give you a win just.
It is my view just
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