Sources vary on the exact numbers, but these 5 large cap tech companies are all high margin with double digit growth.
They have PEGs between .85 and 1.22. As a basket, it’s a 1.03 PEG, with net cash.
Last quarter they announced over $62 billion in buybacks, with net insider buying.
They’re widely covered, with high profile strategists Stephanie Link (a killer), Tom Lee, & Dan Ives all vocally bullish on multiple of them.
They’re down 36-50% from their 52 weeks highs, about 39% as a basket. A gobsmacking, double bear market level selloff.
But the real story is the recent relative outperformance. They are all UP from their February intraday lows. They are up between 2.5 and 10.4%. As a basket, it’s about 4% up vs. Nasdaq down around 9%. 4 out of 5 are up today, between 1.95 and 5.59%. Nasdaq is down .73%, S&P is down .39%.
I will put Vista Partners Robert Smith’s CNBC interview in the comments. He breaks down how increased efficiencies from AI should provide a tailwind, not a drag, for the sector, and how enterprise architecture is necessary for early stage AI deployment.
The companies are Autodesk (ADSK), Applovin (APP), Salesforce (CRM), Servicenow (NOW), and Veeva Systems (VEEV).
So I really like enterprise software for a trade lol. Happy hunting!
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Vista Partners Robert Smith on the need for enterprise architecture in AI deployment:
“In software, anytime there’s a new introduction of technology, it goes through some dynamics of disruption. In fact we’ve had nine dislocations similar to this 25-26% reduction in the IGV index over this period of time. If you recall the last major one was the introduction of this thing called AWS. Everyone said this thing SaaS will eliminate what enterprise software companies do… and it actually ushered in the greatest expansion, because these technologies are enablers for certain software companies. That doesn’t mean some may not go away, but in essence, if you have… call it “sovereign” or “dominion” over workflow and data sets, these probabilistic systems can be very effective in processing the data, but enterprise software delivers deterministic outcomes, so you need the scaffolding of these enterprise software workflows and data sets in order for it to prove to be very valuable in an agenetic world.”
and later…
“Satya Nadella said that what people are going to need to focus on in 2026 is: are they leaching enterprise value by taking their data to these models. What’s actually occurring now, their enterprises realize, you have to take these models to the data, operate in air gapped environments, on-prem environments, utilizing the capabilities of these probabilistic AI systems, but actually running those AI agents through your enterprise workflows, and your dynamic data, that you uniquely have, to give you deterministic outcomes your customers want.
I like to say, getting a wire transfer mostly right isn’t acceptable in an enterprise environment.”