The apocalypse in SaaS is no longer a myth. Intuit (INTU), Adobe (ADBE), and Salesforce (CRM) continued to show substantial weakness. S&P Global (SPGI), a financial data and stock exchange provider, spooked the sector.
SPGI stock lost 9.71% on Tuesday to close at $401.08. Revenue rose by 9.2% Y/Y to $3.92 billion, while non-GAAP EPS was $4.30. However, the firm warned that revenue will grow between 6.0% and 8.0%. On the surface, the guidance appears conservative. It is spinning off Mobility, which hurts future results.
Value investors might buy the dip in SPGI stock on the bet that AI cannot offer the research and tools that the firm is renowned for. Still, growth rates risk falling in the high single-digit percentage, if customers use AI solutions instead.
Companies in the consulting space whose shares are also slumping include Gartner (IT) and CGI (GIB).
AI might also take the market share enjoyed by traditional wealth management and tax preparation software. LPL Financial (LPL) and Raymond James Financial (RJF) fell by 8.3% and 8.75%, respectively, on Tuesday. The dip might create a buying opportunity. However, those firms trade at a premium P/E multiple.
Intuit (INTU) looks like a potential buy. It offers strong profitability, while the forward P/E of 18.8 times is not excessive.
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