Transcript:
Hey everyone, it’s Tony from Gasima.
A few years ago, a famous venture capitalist once said that software is eating the world. Now, apparently, if you look at the market, AI is eating software. Make no mistake, there are powerful changes afoot and trends that investors need to pay attention to. But at the same time, given all the volatility in markets—particularly in tech stocks—sometimes it pays to take a step back and get a little perspective.
For instance, I would be skeptical to base my investment thesis on the future of the technology industry on a blog post. And yet, a blog post took the entire tech market down over the last few days. Entire industries don’t get taken down in a day just because someone wrote an article, nor do name-brand technology companies fail just because somebody said so on the internet. These companies are vital to businesses and consumers, with solid financials, and they’ve been sold mercilessly over the last few days.
The software industry is a $700–$800 billion revenue market projected to grow to a trillion dollars by the end of the decade. It’s intertwined in so many aspects of our lives that, frankly, it has eaten the world. Now, I’m the first to stand up and suggest that something really big is happening in terms of how we consume technology today. However, just this morning we saw three different name-brand software companies collaborating with Anthropic—the poster child of the avant-garde AI companies that were supposedly eating these software companies just days ago because of their new class of large language models called Quad.
If that’s causing fear in the eyes of investors—and maybe even a software executive or two—let’s get some perspective. Is AI really eating software, or is it partnering with it to take its capabilities to the next level in terms of functionality?
So, lesson learned: do your homework. Watch your risk. Don’t be swayed by short-term movements in stock prices. If you have an investment thesis, that’s great—but constantly check it, recheck it, and re-underwrite the opportunity.
If you need help developing an investment thesis that works for you, call us now at Gasima Financial.