Matt Frankel

The online homework, help, and tutoring platform Chegg is probably the most extreme example of this so far.

The stock is down by 99%, not even misspeaking, down by more than 99% since peaking in 2021.

Essentially, free AI tools that are available, like ChatGPT, have literally replaced its core product.

Even Google, since it chose AI right in search results, it's done that.

Revenue is falling by 40% year-over-year right now.

Traffic from its users is dropping even faster.

But with most of the stocks that we're covering, including the two that were mentioned by the listener, that have been beaten down, nothing has really happened yet except investor fears.

It's estimated that more than $2 trillion in market cap has been wiped out by SaaS businesses in the first quarter of 2026 alone.

But some of the most vulnerable businesses that we'll get into in a minute are still seeing revenue climb and more businesses adopt their platforms.

For example, ServiceNow stock has dropped over 50%.

over the past year, despite growing subscription revenue by more than 20%.

Datadog is down nearly 40% from its high.

Booking surged by 37% year-over-year in the latest quarter.

Adobe is another one that's trading for roughly one-third of its historic price to earnings valuation.

Now, I'm not saying that these companies aren't going to be impacted by AI.

But in a lot of cases, so far, there's a disconnect between the stock performance and the actual business results we're seeing from the company.

The worst-case scenario, simply put, is that AI renders a lot of these SaaS businesses essentially worthless or at least a lot less useful than they are right now.

Like I mentioned a minute ago, we're already seeing signs of disruption in a few popular SaaS businesses, but not many.

For example, it would be terrible for companies if

like Atlassian, if AI just allowed businesses to simply code their own workflow automation.