1 October we become SureStone CapitalSame team, same ABN. Our website and email addresses move to surestone.com.au.
Preparing video
Key points
Van Keulen views the AI-driven “SaaS apocalypse” narrative as exaggeratedRe-accelerating growth in some US software names seen as an early sign of sentiment turningXero (ASX:XRO), REA Group (ASX:REA), Carsales (ASX:CAR), Seek (ASX:SEK) and WiseTech Global (ASX:WTC) cited as key local beneficiaries of network effects and product depth
AI ‘SaaS apocalypse’ narrative overdone, says Morningstar’s Roy Van Keulen.
Roy Van Keulen from Morningstar states that the sell-off in major software and SaaS names looks overdone, arguing the market is over-extrapolating the impact of artificial intelligence on traditional software. Van Keulen frames current sentiment through the lens of the Gartner hype cycle, suggesting investors move from extreme enthusiasm about AI replacing most jobs, to excessive pessimism toward incumbent software, despite what he sees as more modest real-world productivity gains.
Van Keulen points to re-accelerating revenue growth in US software names and cites Atlassian as an example of a company sold off heavily before later showing improving fundamentals. He expects boardrooms to reassess AI spending as costs and benefits become clearer, potentially redirecting budgets back toward established software platforms. Forthcoming listings of AI players such as OpenAI and Anthropic are, in his view, likely to bring “gravity” back to valuations as investors scrutinise profitability and cost drivers.
Locally, Van Keulen highlights strong network effects at Xero (ASX:XRO) and marketplaces such as REA Group (ASX:REA), Carsales (ASX:CAR) and Seek (ASX:SEK). He sees WiseTech Global (ASX:WTC) as particularly well positioned, viewing its deeply complex, feature-rich platform and transaction-based pricing as powerful defences against AI-enabled disruption over the long term.
