We’re living through something we’ve never quite seen before in B2B software and SaaS.
It’s arguably the worst time in our history to be invested in public software stocks. Multiples at all time lows, and crashing hard in 2026. And simultaneously, the best time in our history to be invested in private hot (AI-fueled) startup stocks.
The Public B2B + SaaS Bloodbath
We’re barely three weeks into 2026, and look at what’s happened to some of the most iconic names in enterprise software:
- HubSpot is down 51% over the past year. Fifty-one percent. The company that literally wrote the book on inbound marketing. The SMB SaaS darling.
- ServiceNow is down 36%. The workflow automation giant. Analysts are openly talking about the “death of SaaS” narrative coming for them in 2026.
- Monday.com is down 44%. One of the fastest-growing work OS platforms of the past five years.
- Atlassian is down 26.9% YTD. Twenty-seven percent in eighteen days. This is a company that basically invented modern developer collaboration. Jira is in every engineering org on the planet.
- Intuit is down 17.7% YTD. The company that owns TurboTax, QuickBooks, and Mailchimp. Printing money for decades.
- Adobe is down 15.4% YTD. The creative cloud monopoly. Every designer, every marketer, every content creator.
- Workday is down 13% YTD. The HCM giant that replaced Oracle and SAP at half the Fortune 500.
- Datadog is down 12.5% YTD. One of the best-run cloud infrastructure companies of the past decade.
These aren’t speculative bets. These are category-defining, cash-generating, moat-having software businesses. And they’re getting absolutely hammered. Wall Street is calling it a “software slaughter.” KeyBanc’s analyst literally downgraded ServiceNow citing the “death of SaaS” narrative.
Meanwhile, In Private AI Land: The Numbers Are Absolutely Insane
The contrast couldn’t be more stark. Let me just walk you through what happened in private AI funding over the past twelve months, because I don’t think people fully grasp the scale here.
- OpenAI raised $40 billion. At a $500 billion valuation. The largest private funding round in tech history. They’re projecting $13.5 billion in revenue for 2025.
- Anthropic raised $16.5 billion across two rounds in 2025 alone—first a $3.5B Series E at $61.5B, then a $13B Series F at $183 billion to $350 billion in January 2026. Revenue grew from $1B to $5.5B+ run-rate in just 10 months, and on to $9B-$10B today.
- xAI hit $230 billion valuation with their latest $20B round led by Nvidia. They’ve raised over $42 billion total. For a company founded in 2023.
- Databricks raised $5 billion at a $134 billion valuation last month.
- And it’s not just the foundation model companies. The application layer is seeing the same insanity.
- Harvey (legal AI) went from $3B → $5B → $8B valuation in a single year. They raised $760 million across three rounds in 2025. Three rounds. In one year. They crossed $100M ARR in August—just three years after founding.
- ElevenLabs (voice AI) is now in talks to raise at an $11 billion valuation—per the Financial Times just two days ago. Let me walk you through this trajectory: $1.1B in January 2024 → $3.3B in January 2025 → $6.6B in September 2025 → $11B now. That’s 10x in two years. For a company founded in 2022 that didn’t exist three years ago. They’re at $200M ARR.
- ClickHouse just raised $400M at a $15 billion valuation—more than doubling from their $6.35B valuation just eight months ago. They’re riding the AI infrastructure wave hard.
- Cursor/Anysphere raised $2.3B at a $29.3B valuation. A coding tool.
- Safe Superintelligence (Ilya Sutskever’s company) went from $5B to $32B valuation in less than a year on a $2B raise—and they haven’t shipped a single product yet.
2025 saw over $225 billion deployed into AI startups—46% of all venture capital. Five companies alone (OpenAI, Scale AI, Anthropic, Project Prometheus, and xAI) raised $84 billion. That’s 20% of all VC funding in one year going to five companies.
What the Markets are Really Saying
The winners list in public markets tells the story. Look at who’s UP 10%+ this year:
Lam Research (+30.3%), KLA Corp (+29%), Applied Materials (+27.3%), ASML (+27%), Micron (+27.1%)—these are all semiconductor and chip manufacturing plays. The picks-and-shovels of the AI gold rush.
Intel (+27.3%) and Western Digital (+28.6%) are benefiting from the insatiable demand for compute and storage.
And then there’s Nvidia. While SaaS companies are getting slaughtered, Nvidia has created more wealth for employees than almost any company in history. A survey of over 3,000 Nvidia employees revealed that 78% are now millionaires. Nearly half have a net worth exceeding $25 million. If you extrapolate across their 36,000+ workforce, that’s roughly 27,000 millionaires. At one company.
Jensen Huang said it bluntly: “I’ve created more billionaires on my management team than any CEO in the world.”
A mid-level Nvidia employee (not an engineer) who maxed out the ESPP for 18 years retired with $62 million. The stock is up over 900% since ChatGPT launched. Up 3,776% since 2019.
The market is saying: we’ll pay up for the infrastructure that makes AI possible—and we’ll make those employees generationally wealthy—but we’re deeply skeptical that incumbent software can adapt fast enough.
This matches what we saw in our SaaStr.ai valuation calculator data across 600,000+ startup valuations: AI-native companies are commanding 2-4x higher valuations at similar revenue levels than traditional SaaS. At Series D, AI-native companies showed 50x higher valuations than traditional SaaS. That’s not a typo.
The Markets Are Pricing Wholesale Disruption. And We Are Seeing It.
Harvey at $8B with $100M ARR = 80x revenue multiple. ElevenLabs at $11B with $200M ARR = 55x revenue multiple. Cursor at $29.3B = probably 100x+ whatever their ARR is.
Meanwhile: HubSpot down 51% and trading at ~6x revenue. ServiceNow down 36% and trading at ~12x revenue. Workday trades at ~8x revenue. Atlassian at ~7x revenue. Adobe at ~10x revenue.
Private AI companies are getting 3-10x the multiples of public SaaS incumbents. The market is pricing in wholesale disruption of existing software categories.
What This Means For Founders
If you’re building an AI-native company: This is your moment. You know this. The capital is there. The market appetite is there. But understand that you’re being valued on a future that assumes wholesale disruption of existing software categories. You need to actually deliver that disruption. That insane growth has to keep being … insane. Mind-bendingly insane.
If you’re running a traditional B2B / SaaS company: The market is telling you something you should have already heard. It’s not enough to add AI features. It’s not enough to just be growing “decently” — because no one is going to acquire you in most cases. Not right now, at least. You need to fundamentally rethink whether your category even exists in five years—and if so, what it looks like. You need to be the agentic disruptor. Often, of yourself.
If you’re an investor: This divergence can’t last forever. Either public B2B + SaaS will prove more resilient than the market fears, or private AI valuations will come back to earth when the winners and losers shake out. But the data from our SaaStr.ai valuation calculator suggests this isn’t just hype—AI-native companies really are growing 68-138% faster than traditional SaaS at every stage.
We Don’t Know How This Plays Out. Yet.
I don’t know how this plays out. Nobody does. Salesforce’s agentic play seems particularly promising, for example. Even if early.
But I do know that if you’re building software in 2026, you can’t afford to pretend AI is just another feature. It’s an existential question for every software category.
And the public markets, for all their short-term noise, are telling us exactly that. They’re crushing the incumbents while private capital floods into anything with “AI” attached at valuations that would have seemed absurd 24 months ago.
Strange world indeed.
