Jason Ware

But that, in my mind, is firmly discounted when you look at Salesforce trading at 14 times earnings.

This thing is never traded at a PE below 30 until we got in this whole like software is going to be eaten by AI narrative.

And so, yeah, okay.

I take that at its face and say, yeah, there's going to be a slowdown in some of the seat-based economics.

I think over time, that's gonna be overwhelmed by the hybrid approach that software companies are gonna take, some seat-based sales and then some consumption-based.

I mean, if you look at, I'm talking about a book here though, if you look at Salesforce, I mean, they've been out in front of this.

AgentForce, they've been doing that for a couple of years and Benioff's been pushing that since like the fall of 2024.

And so you hear like some analysts say, well, but the enterprise software companies that don't have an agentic strategy are going to be toast, maybe.

But, you know, ServiceNow and Salesforce and a lot of these folks, they do have a strategy for agentic and they are pushing that.

And we are seeing growths like 300% growth last quarter for Salesforce and AgentForce.

So, yeah, I think there's some truth to the concern around software.

But I think if you're in the right space and if you own the companies that do have a strategy that's hybrid, they can overcome that seat-based pressure and make up for that with consumption over time.

And again, at 14 times earnings, like how much seat-based compression is in that valuation?

A ton, way too much in my opinion.

Used to be Avocado, and now it's MuseSpark, yeah.

Yeah, I mean, it's somewhat confusing because I will say that they're spending a ton of money, right?

Like when Amazon spends a ton of money or Microsoft spends a ton of money or Google spends a ton of money, you know, there's been this concern on the street for a couple of years now about ROI on AI.

Say that fast, like five times, you know?

Yeah.

And my pushback has always been we're seeing ROI in largest hyperscalers.