Feb. 3 at 6:11 PM
Never easy to pinpoint a bottom. But it does feel like we’re getting close in software.
Earnings are coming up, which should start to surface what really matters here:
• Retention
• Revenue durability
• Underlying growth resilience
We also know positioning is washed out. Prime books are showing the lowest software exposure on record.
Valuations have reset hard. Don’t love it for ones we own but comes with territory.
Many leaders now trade at low-teens to high single-digit multiples. think Salesforce, Monday, Wix
Many are building real AI layers, not just buzz words.
Hard to call a bottom to the T but when you have:
• Exposure already flushed
• Fundamental data about to improve visibility
• Valuations where industry leaders often trough
That’s typically decent setup.
We’ve seen this movie before but again this is referring to category leaders that have multiple product lines but think
Microsoft in 2014
Apple in 2016
Google ~4 years ago
Meta in 2022
Netflix in 2021–2022
Not saying history repeats exactly. Those all troughed low teens to high single digits.
But this feels like one of those moments where patience and fundamentals start to matter again as oxygen feels heavily pulled out.
$MSFT $IGV $WIX $CRM