SaaS Cashes In on Its Own Apocalypse

Atlassian (TEAM) reported a 28% revenue increase to $1.77B in Q4, with a 12% operating margin. Management expects fiscal 2027 subscription ARR growth of 18%, down from 23%. Shares surged over 30% on improved profitability despite slower growth guidance.

Datadog (DDOG) stock rose 116.2% in six months, driven by AI and non-AI demand. Q2 revenue grew 36%, but Q3 guidance of 28-29% growth caused a 16.6% drop. Analysts' average target is $285, 26% above current price. TIKR's model predicts 230% return by 2030. Insider sales and growth deceleration concerns persist.

Shares of software companies like ServiceNow (NOW), Adobe (ADBE), Salesforce (CRM), and Microsoft (MSFT) fell after IBM reported weaker-than-expected software sales, citing client spending shifts to AI servers and cybersecurity. IBM's stock dropped 25.2%, and it expects a 7% decline in its infrastructure business. The group saw overnight gains, with Microsoft rising 0.4%. IBM's CEO noted unexpected capex reprioritization and supply-chain impacts.

Appian (APPN) reported Q2 revenue of $203.3M, up 19.1% YoY, beating estimates. Microsoft (MSFT) reported $90.01B revenue, up 17.7% YoY, also beating estimates. ServiceNow (NOW) reported $3.99B revenue, up 24% YoY, exceeding expectations. All three stocks have risen since reporting results.

ServiceNow reported Q2 2026 results beating expectations, with subscription revenues up 24.5% YoY to $3.877B and EPS of $0.90. The company raised full-year guidance, projecting 21% growth. Bank of America analyst Liani sees undervaluation, setting a $150 target, citing strong AI partnerships and market underperformance.

Salesforce (CRM) and ServiceNow (NOW) both hit $1B in AI revenue but differ in valuation (23x vs. 75x P/E). CRM reported $11.13B revenue, 13% growth, and $6.7B cash flow, while NOW grew 24.5% with $3.877B subscription revenue. Both focus on AI, with CRM emphasizing Agentforce and NOW on AI Control Tower. CRM is down 22.05% YTD, NOW 15.30%.