AI expectations depress public software multiples
The guest argued that public market software multiples are depressed because investors anticipate autonomous AI programs will displace and eat into the growth of established software businesses.
The argument
The host noted that high-performing software companies like Wix and Monday.com are trading at historically low multiples. The guest hypothesized that public markets are pricing in a structural growth deceleration driven by AI disruption, though he argued multiples will rebound if these companies maintain their growth rates.
The thesis, stress-tested
✓ What validates it
- ✓Public software companies maintaining high growth rates in subsequent quarters
- ✓A rebound in valuation multiples for companies like Monday.com and Wix
▸ Risks discussed
- ▸Autonomous AI programs may successfully displace existing software business models
- ▸Growth rates of established software companies could structurally decline
Hear it yourself
"And for whatever reason, if they believe that the growth rate of a company would decline because of whatever reasons, my guess is that is there's an expectation that autonomous programs would would displace and would eat part of the business of those companies, but I'm not sure and and I'm not confident about what I'm saying."
00:00 / 00:25
AFFILIATE LINK · ZORTIX MAY EARN A COMMISSION · NEVER A RECOMMENDATION TO TRADE