Thoma Bravo co-founder Orlando Bravo highlighted the accelerating impact of artificial intelligence on software companies during a recent investor meeting, asserting that many public software firms will face disruption, leading to justified valuation declines. He emphasized that the downturn in software stocks, exemplified by the iShares Expanded Tech-Software Sector ETF (IGV) dropping 28% from its peak, reflects a broader market adjustment to AI advancements that threaten existing business models.
Bravo acknowledged that while some companies are rightly seeing their valuations decrease, others are being unfairly penalized despite their potential to thrive in a transforming landscape. His comments come amid criticism from Apollo Global Management’s John Zito regarding inflated software valuations, particularly referencing Thoma Bravo’s own acquisition of Medallia, which Bravo admitted was overvalued due to misjudged growth expectations.
Market professionals should closely monitor the evolving software landscape as AI continues to reshape industry dynamics. For a deeper dive into Bravo’s insights and the implications for specific software stocks, I recommend checking out the full article.
Source: cnbc.com