THE SAAS ROUT OF 2026 IS EVEN WORSE THAN YOU THINK

Summary from the TLDR Founders newsletter

For the first time in the modern era, software stocks now trade at a discount to the S&P 500. The iShares Software ETF (IGV) is down over 21% YTD and roughly 30% from its September 2025 peak, wiping out about $2 trillion in market cap. The structural problem: AI is breaking the link between headcount growth and revenue growth. If agents replace seats rather than complement them, the per-seat recurring revenue model that justified premium software valuations could unwind entirely.