What To Do After The AI Bubble Story Suddenly Shifted

Chris LauInvesting Group LeaderFollow5ShareSavePlay(9min)CommentsSummaryThe iShares Expanded Tech-Software Sector ETF is not a good alternative to SaaS, though it also reflects market fears that AI will erode software subscription growth and profitability.IGV's top holdings, including MSFT, PLTR, and ORCL, dilute pure SaaS exposure and introduce risks from hardware, consulting, and rising leverage.Select SaaS names—INTU, ADBE, CRM, and APP—offer differentiated value, with INTU and ADBE showing strong profitability and APP leveraging AI for cost advantages.AI-driven disruption is nuanced; SaaS valuations may rebound as markets recognize persistent demand and the limits of low-cost AI alternatives.Looking for a portfolio of ideas like this one? Members of DIY Value Investing get exclusive access to our subscriber-only portfolios. Learn More » Just_Super/iStock via Getty Images Late last year, software-as-a-service stocks had trouble breaking out of a range that started in mid-2025. iShares Expanded Tech-Software Sector ETF (IGV) traded at between $105 and $107.99. In November, selling momentum accelerated but benefited from a liftThis article was written byChris Lau35.79K FollowersFollowChris Lau is an individual investor and economist with 30 years of experience covering life science, technology, and dividend-growth income stocks. He has degrees in Microbiology and Economics. Chris runs the investing group DIY Value Investing where he shares his top stock picks of undervalued stocks with catalysts for upside, dividend-income recommendations with quant and payment calendar tracking, high upside plays, and research requests to help you become a better do-it-yourself investor. Flagship Products:1. Top DIY Picks: Undervalued stocks have upcoming catalysts that markets do not expect.2. Dividend-income Champs that have a long history of dividend growth. Includes printable calendar and quantitative scores. 3. DIY Community Picks for a speculative allocation positive momentum.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.