Earlier this year, the market feared AI would gut software firms. The man who runs nearly $200 billion in software bets says they had it backwards.
AI, he argues, is the best thing to happen to the group.
The Fear Had A Name
Back in February, software stocks took a beating. The fear was that AI tools could replace the subscription software firms pay for.
The trigger was Anthropic. It rolled out new tools for its Claude co-working agent, and the sell-off was fast.
That fear even got a nickname, the "SaaSpocalypse." It spread fast.
SaaS stands for software-as-a-service. It is the model where firms pay a monthly fee to use software online.
Orlando Bravo runs private equity giant Thoma Bravo. He says that fear is now done.
He made the call at a big finance event in Berlin. In his words, it is finished, no more.
AI Is Feeding Software, Not Eating It
Bravo's firm owns a huge chunk of the software world. Its companies bring in about $35 billion in sales.
He says most of them are booming. The proof is hard to miss.
About half of his new revenue now comes from AI features. His point is that software firms do not sit still.
They build AI right into their products. That pushes them to a new level.
He says firms can reach that level by handing some routine human judgment to software. The work that used to need a person can now run on its own.
He thinks software and AI will soon merge into one tool for business clients. He expects that shift within the next few years.
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One More Bright Spot
Bravo is not just upbeat on software. He likes chips too.
He says fast-growing areas like semiconductors still offer a cheap way in. That is rare after such a long run.
The shift has been quick. In just a few months, fear turned into hope.
He is not calling it all clear. He just thinks the gloom was overdone.
For investors, the takeaway is simple. Software is adapting, not dying.
The May rally backed up his view. It was the sector's best month in over twenty years.
The doubts have not vanished, though. Bravo just thinks the upside now outweighs them.
What To Watch
The market already started to agree. A big software ETF jumped 21% in May, its best month since 2001.
An ETF is a fund that holds a basket of stocks. So this one tracks the whole software group.
Bravo still sees a bumpy road. He points to real questions around cost, security, and whether the AI tools pay off.
He calls this a period of discovery. For now, Bravo is betting the comeback is real.
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