Orlando Bravo, founder and managing partner of private equity giant Thoma Bravo, stated that the so-called 'SaaSpocalypse'—a period of investor concern over the future of Software-as-a-Service (SaaS) companies due to AI disruption—is now over. Bravo described artificial intelligence as an 'enormous tailwind' for software companies, emphasizing that AI and software tools are merging into new 'agentic solutions' for corporate customers [1]. He revealed that approximately 50% of new revenue among Thoma Bravo's portfolio companies now comes from AI and agentic tools, highlighting the rapid integration of AI into the software sector [1].
Bravo explained that software companies are evolving beyond their traditional roles, leveraging AI to automate aspects of human judgment and processes. He predicted that in the coming years, software and AI will 'come together' to form new agentic solutions for businesses [1]. Despite these positive trends, Bravo cautioned that the market is still navigating questions around governance, cybersecurity, and returns on investment from these new AI-driven tools, describing the current environment as a 'period of discovery' that creates pressure on the system [1].
The article notes that software stocks, which came under pressure in February following Anthropic's unveiling of advanced AI tools for its Claude co-working agent, have since rebounded. The iShares Expanded Tech-Software Sector ETF rallied 21% in May—its strongest monthly performance since October 2001—and has gained more than 9% over the past three months [1]. Bravo also mentioned that high-growth areas such as semiconductors remain attractive for investors, offering a low-entry environment [1].
Overall, Bravo's comments reflect renewed optimism in the software sector, driven by AI adoption and innovation, but tempered by ongoing uncertainties regarding governance and returns [1].
CONCLUSION
Thoma Bravo's Orlando Bravo asserts that the 'SaaSpocalypse' has ended, with AI now serving as a major growth driver for software companies. While the sector has rebounded strongly, ongoing questions about governance and returns mean the market remains in a period of adjustment. Investors are increasingly optimistic, but continue to monitor the evolving AI landscape closely.