Orlando Bravo, founder and managing partner of Thoma Bravo, highlighted a positive shift in the software sector during an interview with CNBC, declaring the end of the 'SaaSpocalypse.' This term referred to a period of decline in Software-as-a-Service stocks, which faced pressure earlier this year after Anthropic introduced advanced AI tools, sparking fears among investors.
Bravo emphasized that software companies are not stagnant; instead, they are evolving and leveraging AI to enhance their offerings. He noted that Thoma Bravo's portfolio companies, which collectively generate about $35 billion in revenue, are experiencing significant growth, with AI contributing to around 50% of their new revenue.
The iShares Expanded Tech-Software Sector ETF has also shown resilience, rallying 21% in May, marking its best monthly performance since October 2001. Bravo acknowledged that while the market is adjusting to new AI technologies, including governance and cybersecurity concerns, the integration of AI into software solutions presents a promising future for corporate customers.
He believes that this period of discovery will ultimately benefit the sector