Meta's job cuts are used as an example of how layoffs directly impact Workday's revenue.
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Most SaaS Stocks Are Not Cheap (Ranking All 15)
Investing Moats with VarunApr 24, 2026
The creator ranks 15 software stocks based on valuation and AI risk, identifying ServiceNow and Salesforce as strong buys (S-tier), Intuit as a hold (B-tier), and Palantir and Monday.com as sells (D-tier). Adobe and Constellation Software are considered A-tier buys, with the latter being the creator's largest personal holding. The creator provides a tiered ranking of SaaS stocks, focusing on their AI integration, business models, and financial health, particularly stock-based compensation (SBC) relative to free cash flow. Constellation Software is highly rated for its acquisition strategy and capital allocation, while Cloudflare, Datadog, and Snowflake are criticized for high SBC and negative real owner's earnings. Atlassian and CrowdStrike receive mixed reviews due to SBC issues despite AI tailwinds. Shopify and HubSpot are seen as strong businesses but currently overvalued. Workday faces risks from seat compression and co-founder stock sales.
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Zapier is mentioned as a tool that can store contacts, competing with HubSpot.
Microsoft's layoffs are mentioned as a point of comparison, indicating their impact on other companies but not directly on Constellation Software.
Snowflake is a C tier business with a sticky model, but faces a concerning feedback loop where product improvements reduce customer spending and high stock-based compensation.
Workday is a D tier stock due to significant seat compression risk from AI-driven layoffs and consistent share selling by its co-founder.
HubSpot is a low C tier investment, with a strong AI pricing strategy and distribution plays, but faces competition and high stock-based compensation relative to free cash flow.
Shopify is a wonderful business with strong AI integration and pricing power, but its current valuation is too high for a buy, placing it in the C tier.
CrowdStrike is a C tier company, benefiting from AI-native cybersecurity and strong customer retention, but faces a high valuation and significant stock-based compensation.
Atlassian is a B tier investment, benefiting from AI tailwinds that increase Jira usage and its sticky developer-focused products, despite a significant stock-based compensation issue.
Cloudflare is rated poorly due to its high stock-based compensation exceeding free cash flow, indicating negative real owner's earnings and pricing pressure.
Constellation Software is a strong buy, acquiring niche, mission-critical software businesses with AI-immune customer bases, and it's the creator's largest personal holding.
Adobe is an A-tier buy, with its enterprise business strong due to Firefly's IP protection and localization workflows, despite consumer risk and potential seat compression.
Monday.com is a D-tier sell because its work management software is highly displaceable by AI agents, and stock-based compensation exceeds free cash flow.
Datadog is mentioned as a potential competitor in the AI space, but no specific investment thesis is provided.
Salesforce is an S-tier buy, offering an attractive value proposition with strong enterprise moat, AI adoption, and significant shareholder returns, despite seat compression concerns.
Palantir is a D-tier sell due to aggressive financial engineering and an unsustainable valuation, despite its strong AI capabilities.
Intuit is a B-tier hold, offering average potential as AI-native tax tools pose a long-term risk to TurboTax.
ServiceNow is a buy (A-tier) due to its strong enterprise workflow moat, 20%+ growth, and fair pricing, despite recent stock drops.