Concern over the threat that artificial intelligence poses to software companies has hit the shares of companies like Salesforce and AdobeADBE 0.90%increase; green up pointing triangle hard. Investors are questioning whether software companies that sell to businesses can withstand competition from AI-powered rivals. Lately, the selloff has intensified with each new announcement from AI developers.
That marks a reversal for the industry, which became a Wall Street darling thanks to pricey subscriptions, minimal capital expenditures and strong profit margins. Now investors are wondering how long the pain can last…
The slump extends beyond stocks. The sector has an outsize presence in the corporate-debt market, owing to a wave of private-equity buyouts that stretched from the late 2010s into the early 2020s.
Software makes up around 13% of speculative-grade corporate loans that were broadly syndicated by banks to investors and an even larger share of private-credit loans made by asset managers directly to companies. … [end quote]
Even as the speculative loans made to SaaS companies are threatened the separate AI loans are growing to breathtaking levels.
I used to hang out on his board. Mostly just for ideas. I agree with an article I read yesterday that says the market is overreacting, especially with CRWD. I am long, and still in the black. AI is significant, but I continue to think people are overestimating it.
Now quantum computing…that’s a different beast. There are physics involved wherein a quantum computer can break any security protocols we have today (except for air-gap). Conversely, quantum computing can secure our computers against any possible intrusion. It’s quite literally “guaranteed by physics”. Whomever can market a working quantum computer security setup will clean up. To my -admittedly limited- knowledge, no one is going to be able to field such a machine for many years. They barely have working qbits.
