Software Stocks Whipsaw as AI Fears Meet Earnings Beats
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- Bending Spoons agreed to buy Airtable for less than $1.3 billion — roughly 11% of Airtable's nearly $12 billion 2021 peak valuation — reigniting fears that AI is structurally repricing software businesses.
- HubSpot sank 19% on Thursday in its worst session in a decade, pushing its 12-month loss past 50%, while Datadog also fell 19%, its steepest drop since its 2019 IPO.
- Datadog disclosed that its largest AI client — which analysts suspect is OpenAI — has cut usage since June, a concrete data point in the AI-eats-SaaS debate.
- Atlassian jumped 35% on Friday, its best day since its 2015 IPO, after reporting its most profitable quarter since 2021; Twilio popped over 20% and Cloudflare gained 5.6%.
- Atlassian had cut 10% of its workforce (1,600 jobs) five months earlier, a move CEO Mike Cannon-Brookes said was needed to 'self-fund further investment in AI and enterprise sales.'
- Salesforce has lost more than 40% of its value since the end of 2024 despite accelerating revenue growth, as CEO Marc Benioff argues the company's products won't be 'vibe-coded away.'
- The iShares Expanded Tech-Software Sector ETF plunged 24% in Q1 — its worst quarter since 2008 — but has since rebounded to just -3% YTD while the Nasdaq is up 15%, per the article.
Why it matters: The week's whipsaw — Airtable sold for less than 11% of its 2021 peak while Atlassian surged 35% in a single session — shows the SaaS sector has become a sentiment-driven trade where one earnings report can move a stock 20%+. Investors are pricing AI displacement selectively: Datadog's disclosure of usage cuts at a major AI client is the first hard evidence that AI labs themselves are trimming spend on third-party software, validating the bear thesis for some names even as strong execution earns others a reprieve.
