Something unusual is happening in tech. The very companies that were supposed to ride the AI wave to infinity — the software-as-a-service names that minted millionaires over the past decade — are getting absolutely hammered. And the weapon doing the damage? AI itself.
Salesforce is down 32.7% in 2026 alone, and 42.1% over the past twelve months. The fear is straightforward: if businesses can throw a few prompts into an AI chatbot and build their own CRM alternative at minimal cost, why pay Salesforce’s premium? The same logic is crushing the entire SaaS sector. Investors who spent years paying up for “recurring revenue” and “sticky margins” are suddenly wondering if those moats were made of sand.
But here’s where it gets interesting for contrarian investors. Despite the bloodbath, many of these stocks are still expensive. Shopify trades above 80 times trailing earnings. ServiceNow is over 100 times. The market hasn’t decided these companies are going to die — it’s just pricing in the possibility that their margins compress. That’s a very different bet than a death sentence, and one experienced value manager thinks the selloff has gone too far.
Chris Wright, whose fund focuses on value opportunities created by market dislocations, calls this “the most opportunistic market since the COVID pandemic.” His argument: the same pattern played out in 2020, when high-quality companies traded at deeply depressed valuations even as their fundamentals were stabilizing. The uncertainty about AI winners and losers is creating the same kind of mispricing. “Companies trading on rich multiples leave little margin for error,” Wright says. “Even a modest shift in competitive dynamics can justify a meaningful de-rating.” That de-rating is happening now — and some of it has overshot.
The Salesforce case is particularly interesting. Wedbush’s Dan Ives — one of the most-followed tech analysts on Wall Street — thinks the selloff is overblown. His argument: Salesforce has over 150,000 customers, including 90% of the Fortune 500, who “have spent decades codifying their business logic and organizing their data within the Salesforce ecosystem.” Generic AI models can’t replicate that institutional knowledge overnight. CEO Marc Benioff pivoted toward AI as early as 2014 and launched Agentforce, an agentic AI product. At 35 times trailing earnings, Salesforce looks downright cheap next to its SaaS peers.
Beyond pure software plays, the AI fear trade has spilled into adjacent sectors that may be getting punished unfairly. Staffing companies have been sold off on fears that AI will automate recruitment — but there’s no actual evidence of structural impairment yet. Wealth management firms are down on robo-advisor fears that have been circulating for a decade without materializing. The market is pricing in AI disruption that hasn’t happened, and in some cases may never happen.
The key insight for traders: you don’t need to predict which software companies will “win” the AI era. You just need to find the ones where the fear has pushed prices below what the business is worth today — not in some hypothetical future. The best value investments rarely require you to see ten years ahead. They just require the market to be wrong right now. And in software, the market might be very wrong indeed.