TLDR Tech / Founders
The SaaS rout of 2026 is even worse than you think
For the first time in the modern era, software stocks now trade at a discount to the S&P 500. The iShares Software ETF (IGV) is down over 21% YTD and roughly 30% from its September 2025 peak, wiping out about $2 trillion in market cap. The structural problem: AI is breaking the link between headcount growth and revenue growth. If agents replace seats rather than complement them, the per-seat recurring revenue model that justified premium software valuations could unwind entirely.
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