Software Slump 2026: Why Jensen Says AI Won’t Replace SaaS

Hey everybody, welcome back to StocktwitsTV. Host Michele Steele is joined by Megan King to break down two huge storylines: the software slump of 2026 and the NFL’s crackdown on prediction market ads ahead of the Super Bowl. First, Michele tees up Jensen Huang’s argument that the idea of AI “replacing” software is illogical, even as heatmaps show a sea of red across major software names. Megan agrees, saying the current drawdown is driven by uncertainty as investors extrapolate a future where autonomous agents compress seat counts and cap pricing power. Her view is that AI does not eliminate software, it rebundles it, and agents still need systems of record, permissioning layers, compliance logic, and workflow orchestration. She expects pressure to continue through Q1 until the market sees stabilizing core revenue, modest seat compression, and AI revenue that is incremental and margin neutral, with a real inflection point coming from tone shifts and visible revenue proof. Megan adds that incumbents like Microsoft and SAP are positioned to internalize AI value because they control distribution and the data layer, and that patient capital has historically been rewarded when platform incumbents adapt their revenue models. Then it’s the big game and the investor angle: the NFL bans prediction markets from advertising during the Super Bowl while incumbents like DraftKings and FanDuel remain everywhere. Megan argues the move signals prediction markets are a real threat to traditional sportsbook economics, describing them as more exchange-like with lower fees and more efficient pricing. She says a more analytical, price-sensitive cohort may migrate to prediction markets, driving liquidity and long-term engagement, and that sportsbooks will ultimately need to adopt the model, build it, or acquire it to hedge against the demographic and structural shift. Disclaimer: All opinions expressed on this show are solely the opinions of the hosts’ and guests’ and do not reflect the opinions of Stocktwits, Inc. or its affiliates. The hosts are not SEC or FINRA registered advisors or professionals. The content of this show is for educational and entertainment purposes only. Please consult with your financial advisor before making any investment decision. Read the full terms & conditions here: https://stocktwits.com/about/legal/terms/ Chapters 00:00 Software slump of 2026 setup 00:00 Jensen Huang: AI won’t replace software 01:00 Sea of red in big software: Microsoft, Salesforce, Adobe 01:13 Overdone fear or fundamental collapse 01:27 Megan: AI rebundles software, does not eliminate it 02:03 What agents still need: systems of record, compliance, workflow 02:48 Bottom call: likely pressure through Q1 03:05 What the market needs: evidence of AI monetization 03:33 Why incumbents can win: data layer and distribution 04:18 Patient capital view: 1 to 3 years 04:53 Super Bowl setup 05:14 NFL bans prediction market ads during the Super Bowl 05:50 Why the NFL move matters: economics, not ethics 06:37 Prediction markets vs sportsbooks: the cohort shift 07:31 Sportsbooks look outdated vs exchange-like markets 07:57 Incumbent defense move explained 08:15 Robinhood as crossover: stocks plus sports outcomes 09:13 DraftKings and Flutter charts: cannibalization fears 09:42 M and A question: acquire or build 10:07 Megan: sportsbooks will acquire or create prediction markets 11:01 Wrap and outro