🎙️ podcast Analysis February 19, 2026 Odd Lots

SaaS Sector: AI Coding Threat Creates Terminal Value Crisis

Software-as-a-Service Enterprise Software
Tickers
2 Picks
Conviction MEDIUM
Risk Profile 2.1/10 (MODERATE RISK)
Horizon 12-24 months
Signal Snapshot Core Theme: Enterprise Software

AI coding eliminates software company value proposition entirely

Network effects and compliance expertise create sustainable differentiation

GAAP profitability pressure; Results-based pricing adoption

Executive Summary

The median public software company operates at just 5% GAAP net income margins despite reporting attractive non-GAAP metrics that exclude stock-based compensation. This financial reality creates a dual crisis: no valuation floor during AI-driven selloffs and terminal value concerns about code generation replacing entire business models. Jared Sleeper, partner at Avenir Growth, argues that while AI coding tools dramatically reduce software development costs, the value proposition extends far beyo...

Key Investment Opportunity

Enterprise Software Survivors with Network Effects

Companies with strong data moats, regulatory expertise, and ability to transition to AI-powered outcomes pricing will emerge stronger

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