Software stocks are having a terrible year. Names you know well — Salesforce, Adobe, ServiceNow — are down 25%, 30%, even more. The market is convinced that AI will make them obsolete. But is it right?

This week we look at the cheapest software stocks on the planet, what J.P. Morgan thinks about the panic selling, and why one of the world's most important investors just made a very patient, very deliberate bet on the future.

Some of the greatest businesses ever built live in the software sector — recurring revenue, fat margins, almost no physical assets. But this week's video isn't about the best software companies. It's about the cheapest ones.

Names that have fallen 50%, 60%, even 70% from their peaks. Are these bargains hiding in plain sight, or value traps dressed up as opportunity? Before you decide, watch this first. It might change how you think about what's happening out there.

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The "SaaSpocalypse" deepens

Software stocks have entered a bear market in 2026, with major names like Salesforce, Adobe, and ServiceNow each down 25–30% year-to-date. Application software companies are down double digits, while the broader market remains far more resilient. The fear driving the selloff: AI will make traditional software subscriptions obsolete. Whether that fear is rational is the question every value investor should be asking right now.

Salesforce bets $25 billion on itself

Salesforce issued $25 billion in debt to accelerate its $50 billion share repurchase program, executing on roughly 80% of that amount almost immediately. When a company borrows that aggressively to buy back its own stock, it's a loud statement that management believes the market has it badly wrong. Whether you agree with them or not, it's a move worth watching closely.

Greg Abel makes his first big move at Berkshire

Greg Abel, who officially took over from Warren Buffett as Berkshire Hathaway's CEO on January 1, 2026, committed $1.8 billion for a 2.49% stake in Tokio Marine Holdings, paired with a 10-year global reinsurance partnership. It's a confident opening act — patient, international, and built for decades rather than quarters.

J.P. Morgan calls the software selloff "broken logic"

J.P. Morgan analysts argue that investors are simultaneously fearing both AI disruption of software companies and AI overspending by hyperscalers — two contradictory positions that cannot both be true. The bank describes the selling as indiscriminate. When smart money starts using words like "broken logic," it usually means something interesting is forming beneath the surface.

Morningstar sees the US market at a 12% discount to fair value

In its Q2 2026 outlook, Morningstar found the US equity market trading at a 12% discount to their valuations, while noting that the energy sector — up 34% in 2026 — has now become the most overvalued sector after being their top recommendation just a year ago. The message is clear: the easy money in energy has likely been made, and the opportunity may now lie in the rubble elsewhere.

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