Michael Cannon-Brookes, co-CEO of Atlassian.
Scott Mlyn | CNBC
The “SaaSpocalypse” was raging this week. Then it acquired a reprieve.
The pennies-on-the-dollar acquisition of one-time highflyer Airtable, adopted by plunges in HubSpot, Datadog and Figma on earnings studies, all served to underscore investor considerations that synthetic intelligence fashions are consuming away on the worth of pricey software program merchandise.
“I do assume that corporations are going to proceed to make use of these coding brokers to construct performance to possibly act as slightly little bit of stress on renewals,” stated Matt Hedberg, a software program analyst at RBC Capital Markets.
However by the top of the week, Wall Road was reminded that there is nonetheless juice left in an business that, not way back, was seen as driving innovation and was buying and selling at hefty market multiples.
Twilio, a supplier of cloud-based communications software program, and Atlassian, which sells collaboration instruments, every noticed pops of nicely over 20% on Friday after reporting quarterly outcomes. Cloudflare, which helps defend web sites from cyber assaults, gained 5.6%.
Field CEO Aaron Levie, who’s been evangelizing cloud software program since he began his file-sharing firm greater than 20 years in the past, was significantly impressed with Atlassian, which reported its most worthwhile quarter since 2021.
“Big Atlassian quarterly beat,” Levie wrote on X. “There was a misplaced thesis over the previous 6 months that by some means brokers can be unhealthy for sure software program classes. There’s undoubtedly fact on this in some areas, however many have been parsing this poorly.”
Levie’s response displays a degree of nuance that is not all the time obvious within the sell-it-all commerce. Salesforce CEO Marc Benioff has spent months attempting to persuade buyers that his firm’s longstanding software program for gross sales, advertising and customer support will not be vibe-coded away. Salesforce has misplaced greater than 40% of its worth for the reason that finish of 2024 regardless of accelerating income progress and constant margins.
Salesforce and its software program friends have been beneath stress, much less due to their present progress charges and extra due to the more and more widespread view that instruments like OpenAI’s Codex and Anthropic’s Claude Code will slowly — after which quickly — hole out their economics.
The iShares Expanded Tech-Software program Sector ETF plummeted 24% within the first quarter, its worst efficiency since 2008. Nonetheless, it is since rebounded sharply and is now down simply 3% for the 12 months, whereas the Nasdaq is up 15%.
‘Pencils down’
RBC’s Hedberg stated sentiment was so unhealthy within the first quarter that shoppers did not even need to focus on software program.
“Individuals have been pencils down within the house,” he stated. “They simply did not really feel prefer it was price their time to satisfy with software program corporations again then, and that was even high-quality corporations.”
That angle has grow to be an enormous downside for venture-backed software program corporations that raised cash at hefty valuations within the pre-AI period and at the moment are attempting to determine what’s subsequent for them. There have not been any notable SaaS IPOs this 12 months, and 86% of personal deal worth within the first half of 2026 went to AI corporations, based on PitchBook information.
Issues have been amplified on Tuesday, when Italian software program buyout agency Bending Spoons stated it had agreed to purchase workflow administration startup Airtable for lower than $1.3 billion. At its peak in 2021, Airtable was valued at practically $12 billion.
Bending Spoons, which held its personal IPO in July, owns manufacturers together with AOL, Evernote and Vimeo, and now has a market cap of $28 billion.
Two days after the Airtable deal, HubSpot had its worst day available on the market in a decade, sliding 19% and bringing its loss for the previous 12 months to over 50%. Datadog, which sells monitoring software program, additionally sank 19% on Thursday, the steepest stoop since its IPO in 2019. Nonetheless, the inventory has been an outperformer, climbing 72% this 12 months.
Datadog stated its largest AI shopper, which analysts suspect is OpenAI, has minimize utilization since June.
“There’s these reminders that we’re not out of it,” Hedberg stated. “Every little thing’s not clean crusing.”
The temper improved after the shut on Thursday, due to stronger studies from Atlassian, Twilio and Cloudflare. Atlassian CEO Mike Cannon-Brookes credited his firm’s analysis and growth groups for working arduous to present clients “the very best quality at the most effective value and the most effective pace.”
The report got here 5 months after Atlassian slashed 10% of its workforce, or 1,600 jobs, which Cannon-Brookes stated on the time was essential to “self-fund additional funding in AI and enterprise gross sales, whereas strengthening our monetary profile.”
Atlassian’s 35% surge on Friday marked its finest day for the reason that firm went public in 2015. It is nonetheless down 8% this 12 months after dropping one-third of its worth in 2025.
Rishi Jaluria, one other RBC analyst, stated a few of the pop for Atlassian is probably going attributable to quick masking, which means that buyers who wager in opposition to the inventory by borrowing shares and promoting them at the moment are shopping for them again.
“Everybody says Atlassian goes to get crushed by Claude Code and OpenAI Codex, and they also’re achieved,” stated Jaluria, who does not cowl the corporate. “Any proof level that claims, oh wait, this firm is not useless, goes to lead to a brief squeeze.”
WATCH: We don’t assume AI will kill ‘SaaS’ however sluggish decay is unhealthy sufficient: CLSA
