Earlier this year, enterprise software stocks were heavily punished.
The market panicked over a ‘SaaS-pocalypse’ narrative, fearing that generative AI models would commoditize code and eliminate the need for software platforms.
During a CNBC interview with Jensen Huang and Bill McDermott at ServiceNow’s Knowledge 2026 conference in Las Vegas back in May, Jensen explained:
For the first time, service is software. Software is service, and the service industry is 100x larger than the software industry.
Jensen was clearly pushing back on the SaaS-pocalypse narrative and argued that the market completely misunderstands how AI works in an enterprise.
Wall Street feared that an AI would just build its own software or bypass existing platforms.
Jensen countered that AI and AI agents are "tool users", and don’t replace existing workflows, but rather bolster them and drive efficiency.
For example, if an AI agent needs to process an HR request, it won’t reinvent a workflow — it will log into a platform like ServiceNow.
If it needs to log revenue, it will populate a platform like SAP.
Legacy SaaS platforms are still necessary, but humans just have less interaction with these platforms.
Less interaction is actually why SaaS models are transitioning from seat-based user pricing to token-usage.
Customers don’t need as many seats anymore, so companies are instead monetizing on AI usage.
This shift unlinks software revenue from employee headcount, tying monetization directly to the volume of work executed.
By transforming passive tools into AI agents that perform active corporate labor, software companies can tap into a global services market that is orders of magnitude larger than the traditional software industry.
We still don’t know the long term growth implications of this, but from afar, it looks promising.
—> Therefore, AI looks accretive to SaaS for now.
Recent earnings from major SaaS players like ServiceNow, Salesforce, Palantir, Cloudflare and Veeva Systems have further validated this view, proving that enterprise software providers are not being bypassed for the foreseeable future.
And as the AI market has been volatile this summer with worries of a bubble and confusing circular financing, capital has been invested elsewhere, broadening capital allocation across industries like SaaS.
Veeva Systems is one of these software platforms that sold off earlier this year, but is starting to see an influx of market interest and analysts initiating coverage.
There weren’t as many institutional or retail callouts or coverage theses vs. pure enterprise SaaS companies like SAP, Salesforce, ServiceNow, Adobe and others.
I think this is due to most investors not fully understanding Veeva and the value proposition they bring to the broader healthcare market, which we are going to dive into here.
Enjoy.
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