The iShares Expanded Tech-Software ETF (IGV) is down 27% year-to-date. An estimated $2 trillion in market capitalization has been erased from B2B software companies since September 2025. Enterprise software multiples have compressed from 5.6x EV/Sales at the end of 2025 to 4.2x by mid-March. For the first time in the modern era, software trades at a discount to the S&P 500.
Wall Street is calling it the SaaSpocalypse. The immediate cause is seat compression: as enterprises deploy AI agents to execute workflows that previously required human operators, the number of software seats they purchase falls. One agent replaces the workload of roughly five seats. CIO surveys indicate that 40% of IT budgets are being reallocated from traditional SaaS subscriptions to agentic platforms and LLM token usage.
This is not a lean AI story directly. But it is the mirror image of one. If AI collapses the cost structure of using software, it also collapses the cost structure of building it. The per-seat model depended on enterprises hiring large teams who each needed individual licenses. The same AI agents destroying that demand are also enabling small teams to ship products that once required hundreds of engineers, designers, and support staff.
The companies this publication tracks sit on the demand side of this repricing. They benefit from cheaper inference, cheaper tooling, and a structural tailwind that pushes enterprise buyers toward outcome-based pricing and away from headcount-based licensing. The $2 trillion in SaaS market cap did not vanish. It is migrating toward companies that were built for this cost structure from the beginning.