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paxys 7 hours ago

Is 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".

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margorczynski 5 hours ago | parent | next [-]

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.

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roncesvalles 4 hours ago | parent | next [-]

Microsoft has consistently proven over the last five years that they have zero ability to execute. It's an astounding failure after failure to do anything right.

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yuucc 3 hours ago | parent [-]

All my Microsoft friends constantly berate the state of their hiring pipelines. Sprinkle on a paltry comp and this is hardly surprising.

	▲	roncesvalles 2 hours ago \| parent [-]
		It was so ridiculously shortsighted of them to decide as a strategy to underpay all their employees compared to the industry standard, especially considering their ambitions are still fairly unbounded (meaning it's not like they said everything we do will be easier than Google or Meta so we don't need to compete for the same pool of talent). But maybe such a decision was inevitable in their culture. And now it's very difficult to correct.

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TacticalCoder 5 hours ago | parent | prev [-]

> I would say that MS here is undervalued.

Windows 11 though...

	▲	its_magic 3 hours ago \| parent [-]
		Yeah, that one is a real gem. BeST wInD0Wz EvAr

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tragiclos 2 hours ago | parent | prev | next [-]

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.

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alephnerd 3 hours ago | parent | prev [-]

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.