This is Ridiculous (Adobe After Earnings)

A look at Adobe after earnings

I’ve never owned a SAAS company before. Not really. I mean you could say VISA is SAAS, but…I disagree.

Reason being that I always sort of felt the moats were flimsy. Software in general has a fairly low barrier to entry compared to something like warehouses or chip-factories. There are also these companies like Google and Microsoft who are happy to roll out free or very cheap software solutions for all sorts of things. On top of it all, thanks to the wonderful economics of a software company, these guys usually traded at high-ish multiples, so if they were ever to be disrupted it would hurt bad.

And this turned out to be a great prejudice! I spent 3 years watching my TSMC stock quintuple as software company stocks had their multiple eviscerated by the AI narrative. Of course I have opinions on which companies face the greatest risks, but for a while I mainly just sat back and did nothing about it. Reason being I sort of agreed that many software companies would face AI-related challenges and I was hesitant to bet on any of them.