alt Hacker NewsIs it AI or just the market realizing that some of these companies were ridiculously overvalued to begin with.
Here are the p/e ratios of companies mentioned in the article, after the said "pummeling":
* ServiceNow - 70.66
* SAP - 28.70
* Salesforce - 28.15
* Workday - 73.16
* Microsoft - 26.53
So they range from "a bit high" to "still completely bonkers".
Replies
Most of those companies make huge margins by suckering large organizations into outrageous contracts. I don't see how AI moves the needle on this one way or the other.
ServiceNow isn't really an "AI" company - they're one of the silent ITSM and Security companies that are nigh impossible to tear out, and are making silent moves into the OT Security space.
And that makes their "AI" pivot much more sustainable imo - their are already such a giant from a cashflow perspective that if some sort of AI valuation shakeup occurs, they have the drypowder to execute on M&A.
SNOW's closest comparables are CROWD and PANW - basically an Arora style platformization play.
I would say that MS here is undervalued. They do not offer some small software package for a given business problem but the whole shebang - the OS, mail, calendar, office suite, IAM, cloud, etc. + support for each and the whole integration.
You can't realistically replace that with some LLM solution (in the near-term at least) and they can use the AIs to reduce their costs which is mostly people.