Software is deeply oversold (see below $IGV ETF) - Deutsche Bank seems to agree
1. DB argues Anthropic’s Enterprise Agents event reinforces that model providers are more likely to act as orchestration layers on top of incumbent software systems, not replace them, given the deep data, workflows, and metadata embedded in existing platforms (“Claude is only as useful as the data it connects to”). 2. This supports DB’s prior view that AI displacement risk to core software is over embedded in current multiples, making the event incrementally positive for the software sector. 3. Risks remain, including pressure on software development costs, potential changes to the interaction layer that could lower switching costs, and increased competition around the “control plane” for agentic AI, though DB continues to see this dynamic as supportive for infrastructure and compute demand.
P/E multiples tell the story
Software & Services used to rank as the 3rd most expensive industry group, it now sits 9th (and has fallen from 3rd to 13th in Europe). Multiples are down roughly 5.8x globally (around 5x in Europe), a re-rating unmatched by any other industry group. Source: DB, TME
Private Equity's Dry Spell Worse than 2008 Crisis
Source: Barchart
Jamie Dimon is warning about “people doing dumb things,” while Boaz Weinstein believes private credit is still in the very early innings of the wheels starting to come off.
Few areas feel more topical right now than software-backed loans. If anything, it looks like we’re still about two years away from the real surge in extend and pretend activity. Source: RBC, Bloomberg
It seems investors believe in the reflation story.
Source: Goldman Sachs, EPFR
Coca-Cola ($KO) now has a higher P/E multiple than Microsoft $MSFT
Source: Stock Unlock
AI + STABLECOINS ARE COMING FOR GLOBAL PAYMENTS
Markets are reacting for a reason (Source: Bull Theory). Visa (-4.6%), Mastercard (-5.7%), AmEx (-7.2%), and Capital One (-8.8%) fell as AI-driven payments and stablecoins threaten traditional card economics. While cards charge 2–3.5% fees and higher cross-border costs, stablecoins offer near-zero fees and instant settlement. With $33T in 2025 volume (+70% YoY) and projections up to $4T supply by 2030, capital is shifting. Even incumbents are integrating stablecoin rails. Source: Bull Theory
$IBM is down over 13% after Anthropic launches an AI tool that converts old COBOL code to modern languages.
AI code translation directly competes with IBM's legacy modernization consulting.
