Underneath the surface of the TSX Index, there are massive winners making higher highs on the weekly, but they co-exist with colossal underperformers, some of which have crashed. Not corrected or dipped, but crashed and, in some cases, quite viciously. Of course, the AI revolution is unfolding, and it’s causing pockets of euphoria in some places (think the semiconductor names) while causing immense pain and pressure in others (think certain parts of software, most notably Software-as-a-Service or SaaS for short).
If AI delivers on its promises and becomes far more than just a driver of productivity, but a disruptor of traditional business models, including SaaS, questions linger as to whether we’re looking at an overreaction when it comes to the crashed software plays or if it’s too soon in the game to get back into the waters by backing up the truck after a historic sell-off, which, believe it or not, could get a whole lot worse before it gets any better.
Any way you look at it, SaaS is a tough place to be, but if you crave next-level value, though, it’s worth giving some of the names a second look as they look to put in a bottom and start reversing course. In some instances, SaaS plays have already begun to march higher. Some of the less-affected and less vulnerable parts of software are actually on their way to new highs.