Over the past several days, software stocks have once again come under pressure. The storyline is familiar: AI is accelerating, automation is improving, agents are emerging, and traditional SaaS businesses are suddenly perceived as vulnerable. The concern seems logical. If AI can draft documents, analyze data, summarize workflows, orchestrate tasks, and even write code, investors naturally begin to ask what remains for SaaS companies to sell.
Markets tend to react quickly when they sense structural disruption. Ambiguity rarely receives the benefit of the doubt, and when uncertainty increases, selling often precedes analysis. That dynamic appears to be playing out again. However, the assumption embedded in the recent selloff — that AI broadly disintermediates software — oversimplifies what is actually happening. AI is unlikely to eliminate SaaS as a category. What it will do is expose SaaS businesses that were built on fragile foundations rather than durable moats. The distinction lies not in the presence of AI, but in the structural defensibility of the platform.
When Software Is a Veneer
Much of the first generation of SaaS created value by organizing work behind clean interfaces. CRM systems structured pipelines and sales activities. Marketing platforms sequenced campaigns and tracked engagement. HR tools
