Software’s Done With SaaSpocalypse

Software stocks are slowly staging a comeback after a rough start to 2026, as selected companies start to dispel the “AI Eating SaaS” narrative in Q1 with accelerating revenue growth, strengthening retention rates and stable margins.

In today’s post, we explain our forward investment plans in the sector, along with our updated conviction scores across companies that have reported their earnings.

Join us as we help hundreds of investors navigate the rapidly evolving AI innovation landscape amid a tricky Q1 earnings season, identify rock-solid businesses with strong growth trajectories & operational grit and deliver proven alpha-generating returns.

Since March, the TPO Portfolio delivered returns of 21%, significantly outperforming the broader indices.

Friday saw broad-based rallies return to the semiconductor stock complex, with optimism surging after Apple AAPL 0.00%↑ and Intel INTC 0.00%↑ were rumored to have struck a chip-making deal. That deal, and a wave of price target revisions for Micron MU 0.00%↑, AMD AMD 0.00%↑ and other semi stocks, led to semi stocks outperforming the market on Friday, as the SMH ETF SMH 0.00%↑continues to make higher highs.

But that one-day rally in semi stocks should not take away the increasingly structural improvements the software sector IGV 0.00%↑ has been staging over the past month. Last week, software delivered its 4th successive week of gains, a behaviour not seen since September of last year.

What made last week’s rally in software particularly encouraging was that it coincided with Anthropic’s Code Developer conference, where the company once again launched a wave of new Agentic AI features that have historically always managed to reignite “AI Eating SaaS” fears in investors this year.

Except this time was different.

In this post we explain our reasoning behind turning bullish on software and how we are being extra judiciously selective this time with our software picks by focusing on two parameters in the P&L statements of software companies.

📌The TPO Portfolio has staged an impressive rally since March 1, now up 21% 💪, significantly beating the S&P 500 and benchmark ETFs that include QQQ QQQ 0.00%↑ , GRNY GRNY 0.00%↑, IVES IVES 0.00%↑, and SPRX SPRX 0.00%↑ during this period of time.

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At the Claude Code Developer Conference last week in San Francisco, the leading startup on frontier AI models decided to flex its muscles even further on the enterprise AI market.

Remember Claude Managed Agents from a month ago? And the volatile sell-off in software stocks that was caused by the launch of Managed Agents in early April?

At the Developer Conference, Anthropic launched 3 new features that we believe will further shape the broader product roadmap for the software industry, from the perspective of agentic AI.

🤖 Multiagent orchestration, the first Managed Agents feature announced in the keynote, is meant to help enterprises scale their fleet of AI agents that break down complex organizational tasks. Essentially enterprises can now use the multiagent orchestration feature to build agentic teams around lead AI agents and specialized AI agents while delegating outcome-based work goals to these agents.

🎯 Outcomes was the second Managed Agents feature, which lets enterprises define success criteria so that its AI agents can iterate and improve over time.

😴 Dreaming was the third and final feature launched by Anthropic. The company believes that the proliferation of AI agents in the enterprise is creating a need for AI agents to autonomously learn from one another. The Managed Agents dreaming feature extends an agent’s memory by reviewing past sessions to autonomously search for patterns and self-improve.

Additionally, Anthropic also announced that Claude for Excel, PowerPoint, and Word were now generally available, only for paid plans. Anthropic also made their official push into the financial and banking industry by announcing Claude for Financial Services and even got JPMorgan Chase’s Jamie Dimon to do a fireside chat with Anthropic’s Dario Amodei.

And if that wasn’t enough, Anthropic extended model rate limits for three enterprise plans—Pro, Max, and Team—after securing a fresh new wave of 300 MW worth of compute from SpaceX.

If Anthropic’s launch of Managed Agents in early April sparked renewed fears of SaaSpocalypse, last week’s slate of product enhancements and features should have tipped the boat of software stocks further.

But something else entirely happened.