SaaS Losing Its Edge? Futurum Equities Says 95% of Software to Become 'AI Plumbing'

After a brutal first-quarter selloff in software stocks, when the market had pegged them as clear AI losers, the narrative has shifted dramatically.

Recent analysis from Futurum Equities deconstructs this shift. According to experts Shay Boloor, Sam Badawi, and Logical Thesis, 95% of SaaS isn't dead, but it will fundamentally transform into the backend "AI plumbing" that powers new enterprise workflows.

The Interface Disappears, but the Work Continues

Market panic stems from fears that large language models will replace enterprise software. However, analysts argue that while the human interface may vanish, the underlying work—querying data, checking permissions, and running workloads—will actually increase substantially.

"95% of software will become the plumbing layer of the new AI stack," Boloor warned.

For Snowflake Inc., the consumption-based business model means that even if fewer employees are needed, "the number of queries will quadruple," noted Logical Thesis. AI agents still require massive amounts of organizational context to make useful decisions, making data infrastructure critically important.

Bearish Stance on Rich Valuations

Despite optimism about the underlying business, analysts offered a harsh take on current stock valuations. With Snowflake trading at 150 times earnings, Boloor noted he sees no near-term earnings surprise that could justify the premium, leading to a bearish consensus on SNOW's near-term price action.

MongoDB Inc. faced more criticism, receiving a unanimous bearish rating from the experts due to intense competition from open-source alternatives like Postgres. Boloor offered a scathing on-the-ground assessment, saying that while the product is sticky, "every engineer I've spoken to hates it."

Meanwhile, Palantir Technologies Inc. sparked a heated debate over whether any software stock deserves its ultra-premium valuation. While Badawi called Palantir "the software of AI," drawing parallels to Nvidia Corp.'s hardware, Logical Thesis dismissed PLTR as merely an "LLM wrapper" lacking proprietary technology beyond its government moat.

How Are These Stocks Performing?

Stock|1 Month|6 Months|YTD|1 Year|5 Years

SNOW|20.87%|81.37%|48.16%|68.72%|16.30%

MDB|41.05%|23.78%|4.97%|101.51%|20.73%

PLTR|32.34%|29.88%|-1.44%|11.06%|625.12%