Is the stock market going to crash? It might seem a strange question to ask, given the S&P 500 and FTSE 100 are both still riding high.
However, all’s not well under the surface, with the software component of the S&P 500 down by around 30% since October. This has been dubbed the ‘SaaSpocalypse’.
Meanwhile, FTSE 100 data companies such as Experian, Sage (LSE:SGE), London Stock Exchange Group, and RELX haven’t been spared. All have bombed 35% or more over the past year.
According to Deutsche Bank, this sudden sell-off has echoes of the early stages of the dotcom bubble bursting. In March 2000, tech stocks started declining while other sectors rallied for a few months. This is what’s happening now.
Back then, almost everything eventually went south, including non-tech shares like McDonald’s.
Portfolio pain
Like most investors, my portfolio hasn’t escaped unscathed. Axon Enterprise, which has a cloud business that stores digital evidence and offers efficiency tools for law enforcement agencies, and gaming platform Roblox have been hit hard.
So too has e-commerce software provider Shopify and language learning leader Duolingo. Meanwhile, smaller holdings including Salesforce and Cloudflare have tumbled, along with cybersecurity leader Crowdstrike.
To some extent, I was prepared for this. One year ago, I wrote: “More than ever, I think it’s crucial to make sure the software/tech companies we’re invested in aren’t vulnerable to being disrupted by AI. The technology is likely to cause as much value destruction as creation.”
I’m confident that most of these firms will benefit from AI technology rather than be disrupted by it. Especially Shopify, Axon, CrowdStrike and Cloudflare.
I’m not saying each is immediately worth considering, as they all have their own risks. But having confidence in their business models, competitive positions and prospects helps me to stay patient during this period of massive volatility.
Even if the market crashes, I’m not selling any of my shares.
Opportunities galore
Lately, we’ve seen an accelerating rotation out of software companies deemed vulnerable to AI disruption. Anthropic has equipped its Claude Cowork AI agent with new tools that allow it to perform complex workflows – the kinds of tasks many specialised software providers sell as their bread-and-butter products.
The largely indiscriminate nature of the sell-off has created many opportunities, in my opinion. One could be Sage, whose shares have crashed over 20% year to date.
The firm provides business-critical accounting and payroll software for small- and medium-sized enterprises (SMEs). The company has over 2m customers, so AI could be a theoretical future risk if firms leave to save money.
In reality however, accountants at medium-sized firms are risk-averse. I seriously doubt they’re going to ditch a trusted, compliant system for a new unproven AI tool. And even entrepreneurs at small firms take advice from their accountants.
Moreover, Sage has rolled out its own Copilot, an AI assistant designed to automate tedious tasks like chasing invoices and generating financial reports. In Q1 2026, organic revenue grew 10% £674m, with impressive 13% growth recorded in North America.
After the crash, Sage stock’s trading at a forward earnings multiple of 15 (for FY27). That looks far too low for a high-quality and growing company like this, leading me to believe this is a FTSE 100 dip-buying possibility worth taking seriously.
