Investors holding overweight positions in artificial intelligence suppliers should watch the SaaS, or Software as a Service, stocks. Companies like Adobe Systems (ADBE), Salesforce (CRM), and Service Now (NOW) trended lower in the last year.
Markets reasoned that SaaS customers would curtail or, at worst, cancel their monthly subscriptions. Corporations need to cut jobs to lower costs, which lowers demand for SaaS. This is not a solid bearish thesis. Chatbot subscriptions do not offer the same value for corporations. If anything, companies would need both a chatbot and a SaaS subscription to maximize worker productivity.
Risks from Chatbot
Chatbots are still not reliable. Microsoft (MSFT), for example, warns CoPilot users that the AI might provide inaccurate (wrong) answers. Yet Microsoft expects Office 365 users to employ the AI in its spreadsheet and document software.
SaaS stocks to consider include Intuit (INTU), Autodesk (ADSK), Workday (WDAY), MongoDB (MDB), and DataDog (DDOG). However, ServiceNow is especially compelling. The firm offers solutions that help corporations manage their IT needs. That lowers operational costs. Intuit is a potential rebound play, too. It offers AI-driven solutions to service its approximately 100 million customers.
Adobe is not out of the woods. Its image and video processing tools face immense pressure from AI. Moreover, cheap AI alternatives offer free and low-cost image and video creation. Small firms may use Google Gemini (GOOG) to prototype images, for example. They will not need Adobe’s advanced tools in their creative design process.
