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$NOW $IGV $AVPT After listening to $NOW earnings call, my conviction in most of my software exposure has been shaken. I’m open to people debating and maybe changing my mind, so if you disagree please comment 👇 I do believe that there’s a genuine need for governance, observability and AI threat detection layers as agentic AI takes over. As $NOW CEO pointed out, spending forecasts on AI software is going to grow 53% this year, which is 17% faster than AI hardware. On paper this feels like an amazing opportunity for investing in those software layers that make it easier for enterprises to adopt and control AI agents. The problem that I think got reiterated in $NOW’s earnings call is that I don’t see how their product sets can be differentiated over the next 5-10 years. It’s really hard cause I believe in what they have to offer, but I have a difficult time understanding how individual companies in this space don’t end up just competing with better products, which would probably lead to some level of commoditization of those services. And the problem is I do see competition getting incrementally better and then the question becomes will there be enough TAM available to the companies operating in this space? Will the incumbents steal enough market share away with competitive pricing that it becomes impossible for companies like $NOW to sustain their current market cap? I don’t think this concern was addressed in the call today. In fact, with the commentary I believe it was reiterated. I’m still doing more research and thinking on this, but if this is true then we have to ask ourselves what forward multiples do these companies deserve? Do we bid them up for next 3-5 years worth of possible high margins only for them to lose it after that? I don’t know the answer. I’d love to listen to your opinions on this. Again comment 👇

Like I said in the post below, $NOW beating cRPO estimates ($13.20B actual Vs. $13.03B estimates) shows to me that enterprise customers are recognizing workflow platforms to manage the security and orchestration of AI agents. As enterprise-level AI adoption grows, noted by Sundar Pichai from $GOOGL, need for observability, governance and overall security will grow. My concern was that enterprises haven't realized that yet or are still at an evaluation phase, but $NOW earnings shows that enterprises ARE starting to spend on this layer. I'm so far impressed with this report, I will have more thoughts after I fully listen to the call and do some additional research. If you guys wanna hear my thoughts along with few other analysts consider joining our live spaces at 3 PM New York time on Friday.

For a while $IGV felt like a good "hedge" against the AI hardware trade with customer concentration risk that me and many others have been talking about. It seems like market has decided to sell the hardware and today also sell those software layers. $IBM’s recent warning around customers redirecting budgets toward AI hardware and infrastructure has possibly contributed to sell pressure on $IGV today. If that's the case then $NOW earnings today will be crucial in giving a roadmap for lot of these SaaS companies that are providing the security and governance layer against AI for enterprises. What I would like to hear in $NOW earnings call today is growth in their cRPO numbers which would indicate that enterprise customers are increasingly relying on structured workflow platforms to manage the security and orchestration of AI agents. I think we're sitting in a "transition period" where enterprises are being cautious and evaluating which layers they'll need and where is the most value for their needs. I still continue to believe that enterprises are adopting AI aggressively, and it creates opportunity for the application layer and governance software. Especially with security breach news with OpenAI and Hugging Face yesterday, the layer that prevents AI agents from compromising enterprises' proprietary datasets becomes more important than ever imo. It's possible that the market believes that companies today are not capable to deal with threats presented by AI agents, and maybe this is the reason for the selloff ? Or just the fact that enterprises haven't fully realized the need for those layers ? Who knows, we'll find out today...