The Bull Case for Software in the AI Era

**Martin** (0:00)
You can see how much revenue they are gonna get in the next 12 months, and that's this number. And it grew again 20%. And the guidance just stay something around those levels. So revenue and this backlog should keep growing at 20%.
And I think those numbers are just great.

**LGD Set** (0:19)
What's up, everybody? It's LGD Set here, and welcome to Milk Road AI, the daily AI show that dumps the stock, even when the earnings are very positive. Today is July 23rd, 2026 One of the big themes this year has been the death of software. And my God, is it ever unsexy to talk about software stocks compared to all this awesome AI stuff being built. But that may just be the opportunity. Today we sit down with our lead researcher Martin to dive into two software stocks that have been absolutely nuked in the market, yet have both built powerful AI products that will not only help them retain customers, but has also been a blessing to their balance sheets. And of course, we raise the question, is the market wrong about these stocks? And how big of an opportunity is this really? A reminder before we roll, that if you want to see all of Martin's trades, including his solid calls recently on hyperliquid and Robinhood and a basket of other mispriced opportunities, you can try out Milk Road PRO for just a dollar at the link below. And again, a different reminder that our podcast is free today, and it wouldn't be possible without our partners at Securitize, the regulated Rails for Tokenization and BitGet, stocks 2 with real liquidity and real dividends. Keep an ear out later in the show for a message from each of them.
Martin, it's earnings season. We're recording this on Thursday, the 23rd, and earnings have started. You have been on the SaaS Apocalypse Rebound Trail for a very long time. You've written about this in Milk Road PRO.
What are you seeing today?

**Martin** (1:39)
Well, I see that one of my favorite SaaS companies that were supposed to be dead, just showed their Q2 earnings and they smashed all the estimates.
And the company is ServiceNow. All the estimates were just beat out. So I think what this company is actually doing is just proving my thesis that SaaS might not be dead. It's quite the opposite because in this show, you talk with Melvin, Vincent, Kyle, and the common narrative is that intelligence is getting cheaper and better, which means that I'm able to do more work for less money using AI. And I think that's the core of my thesis. And once you agree with this take, you are going to the market and you are going to start thinking about how you can express that thesis in the markets.
And who is in the best position to really benefit from this trend. And I think ServiceNow is probably in the best position in all the SaaS businesses because they are integrated pretty much in every Fortune 500 company. And so it's pretty easy for them to just upsell another service and just provide more efficiencies in their business flows because they have already access to their databases, they know all the details or the workflows, all the governance, all the rights, all the approvals, all the chains that those companies use. And so it's just so easy for them to upsell AI. And I think on the earnings call yesterday, the CEO said that it's already starting to sort of replace humans or labor. So it's really becoming an arbitrage. So you can have, I don't know, 50 people doing customer relations, or you can have ServiceNow, who is gonna provide you some of those services as well, but it's gonna cost you a fraction of like, what you would have to pay to humans. So I think that's pretty interesting. And it's still something that it's not showing on profit statements yet, like at scale. But the comments that I see from those people and the analysts that they're asking on the earnings calls, the whole narrative is like about this. It's not about selling the old business that that's how they grew, but it's more about like, okay, where this is heading and quite frankly, this is a transitioning phase for like all the companies. I think all companies in the world needs to find their AI strategies and their AI approach. And most of them will find that to implement AI successfully in the companies is not a trivial task. And so most likely, a lot of them are going to outsource that to some companies that are able to do it. And again, it's pretty easy to just, you know, okay, we work with ServiceNow today. They have access to like everything we do. They provide backend for most of our stuff anyway. So let's just ask them for like more services from there. And like really make those productivity gains leveraging AI because that's what investors want. And when I was thinking about my portfolio and my like all my companies, I said like, when I am listening to the earnings call and they are not talking about AI at all, I am starting to be like very bearish because I think we have at the point where I think you need to have your AI strategy.