Today a colleague led off a Teams meeting by demonstrating something that would have been impossible a year ago. In about two hours, he’d built a feature-for-feature replacement of a SaaS application our organization pays $2,900 a year for. It’s not a huge line item. But it’s something that dozens of people across the company log into regularly. Once the department heads and managers weigh in with their specific tweaks, it’s likely to replace the vendor product entirely.
$2,900 isn’t a big number. But it’s money that can go somewhere else. And multiply that by every tool, every department, every company—and you start to understand why Wall Street is panicking.
A CNBC Reporter Did the Same Thing on Live TV
Yesterday, CNBC’s Deirdre Bosa demonstrated something similar on air. She used Claude Code to build a project management app—something like a Monday.com, which she noted is a $5 billion public company. In about 30 minutes and a few prompts, she had a functioning dashboard with tasks, statuses, and assignees. Then she connected it to her Gmail and Google Calendar and got something she described as “incredibly useful.”
She’s not a developer. She said so repeatedly. And that’s the point.
What struck me about her segment wasn’t the demo itself—I’ve been writing about this for weeks. It was what she said afterward: “This is the worst that these tools are ever going to be.” That’s the line that should keep SaaS executives up at night.
The same kind of demonstration my colleague gave today is probably happening in offices everywhere. Most of them aren’t on CNBC.
The Market Is Taking Notice
The iShares Expanded Tech-Software Sector ETF (IGV) has been in freefall. As of today, it’s down 28% from its September 2025 peak—six consecutive trading days of losses. On Monday, February 3 alone, approximately $285 billion in software market value was wiped out in a single session. Trading volume hit its highest level in the ETF’s 25-year history. Jefferies’ equity trading desk dubbed it the “SaaSpocalypse.”
The individual names tell the story:
| Stock | Decline |
|---|---|
| Monday.com (MNDY) | Down 70% from all-time highs |
| Oracle (ORCL) | Down 56% from September peak |
| Atlassian (TEAM) | Down 35% YTD |
| Salesforce (CRM) | Down 28% YTD |
| ServiceNow (NOW) | Down 25%+ from peak |
| Adobe (ADBE) | Down 20%+ YTD; lowest price since April 2020 |
Hedge funds have made $24 billion shorting software stocks so far in 2026, according to CNBC citing S3 Partners data. The broader software sector has shed roughly $1 trillion in market value. Analyst Gil Luria at DA Davidson put it bluntly: “Hedge funds are all net short software right now.”
The catalysts are stacking up. On January 30, Anthropic released plugins for Claude Cowork that automate legal, finance, and sales workflows—$285 billion in market value evaporated the following Monday. On February 2, Palantir’s CTO told investors their AI could reduce complex SAP ERP migrations from years to “as little as two weeks.” Piper Sandler downgraded Adobe and slashed price targets across the sector, citing “seat compression and vibe coding” as structural headwinds.
Not everyone agrees this is rational. Nvidia’s Jensen Huang called the idea that AI replaces software “the most illogical thing in the world.” Bank of America called the selloff “internally inconsistent,” arguing you can’t simultaneously believe AI investment will stall and that AI adoption will be so pervasive it destroys legacy software. BTIG noted that software has underperformed semiconductors by 20% over the last 20 trading days—the largest gap since the dot-com peak in February 2000—suggesting a snapback is overdue.
Maybe. But the demonstrations keep coming.
And Then the Tools Got Better
As if the timing couldn’t be more pointed, Anthropic released Claude Opus 4.6 today. The improvements read like a checklist designed to accelerate the very disruption the market is pricing in:
- 1 million token context window (beta) — A first for Opus-class models. That’s roughly 30,000 lines of code or 1,500 pages of text in a single prompt.
- Agent teams — Multiple AI agents can now work in parallel on different parts of a project. One writes code while another reviews it while a third runs tests.
- Adaptive thinking — The model autonomously determines how much reasoning effort to invest based on the complexity of what you’re asking.
- Improved coding benchmarks — Opus 4.6 leads GPT-5.2 on agentic coding and software engineering tasks.
It also discovered more than 500 previously unknown zero-day vulnerabilities in open-source code—just as a side demonstration of how deeply it can analyze a codebase.
The model Deirdre Bosa used yesterday to replicate Monday.com in 30 minutes? The version that launched today is better.
It’s Not Theoretical Anymore
A few weeks ago, this was a conversation about what might happen. Now it’s a conversation about what is happening—in the market, on live television, and in ordinary meetings at ordinary companies.
My colleague’s demo today wasn’t a technology showcase. It was a procurement decision. He didn’t build a replacement for fun—he built it because an executive asked if we could do it for less. That calculus is now available to every organization with someone willing to ramp up on the coding tools. Getting it from a demo to a production system still takes real knowledge—but the gap is closing fast.
The SaaS model was built on the assumption that software is hard to build, expensive to maintain, and worth paying for monthly because the alternative—building it yourself—was worse. Two of those three assumptions are failing. What remains is maintenance: who supports the thing when it breaks at 2 a.m.? That’s a real question, and it’s the moat that enterprise software still has. But moats shrink when the tools on the other side keep getting better every few months.
The software that survives will be the software that’s genuinely hard to replace—deep integrations, regulatory compliance, network effects, years of domain-specific data. The rest is on borrowed time.
My colleague saved us $2,900. Deirdre Bosa replicated a $5 billion company. And the tools just got better. Again.