The software sector, especially SaaS, has faced a severe downturn due to fears of AI disruption. However, companies like Monday.com demonstrate strong growth, profitability, and enterprise adoption, making them attractive investments. Additionally, Medicus Pharma is innovating in cancer treatment with a promising micro-needle chemotherapy approach. This article explores these opportunities and market dynamics.
The software sector, particularly Software as a Service (SaaS), has experienced a dramatic decline in 2026, with many stocks down significantly from their recent highs. Despite this, some companies continue to show strong growth and resilience. One such company is Monday.com, which is currently down about 83% from its highs but is demonstrating massive and consistent growth in paid subscriptions and enterprise contracts.
This article explores why Monday.com is considered by some analysts as a "deal of a lifetime," the broader context of the software sector's challenges, and also highlights an innovative biotech company, Medicus Pharma, which is developing a novel treatment for basal cell carcinoma.
The software sector has been hit hard in 2026, with the software ETF (IGV) down roughly 30% from its September highs, wiping out over $2 trillion in market capitalization. Major companies like Oracle, Microsoft, Figma, Duolingo, DocuSign, HubSpot, Monday.com, Salesforce, and Adobe have all seen significant declines ranging from 27% to over 85%.
The primary cause of this sell-off is the fear that AI advancements, such as Anthropic's AI agents platform "Co-work," could automate many enterprise software functions. This could reduce the need for multiple software licenses, threatening the SaaS business model that relies on selling more seats at higher prices annually.
Wall Street reacted strongly, pricing many software companies as if they were going to zero.
Building a beta or version 1 of software is only about 2% of the work. The remaining 98% involves integrations, compliance, security audits, reliability, customer support, and handling edge cases for large enterprises—areas where AI currently cannot replace human expertise.
Moreover, despite fears, customer retention remains strong with gross retention rates around 90% across the sector. Enterprises are not canceling licenses en masse; in fact, renewals are robust.
Software companies are now trading at historically low price-to-earnings multiples, below the overall S&P 500. For example, software's P/E multiple has dropped from 84 times earnings a few years ago to just 22 times today.
Respected analysts like Dan Ives call this a "generational buy," and major banks like JP Morgan and Goldman Sachs believe the market has priced in the worst-case AI disruption scenario. Goldman projects the application software market to grow to $780 billion by 2030.
In February 2016, the SaaS sector experienced a similar panic with massive single-day drops in stocks like LinkedIn, Tableau, and Salesforce. Analysts predicted the multiples would never recover, and growth would stall.
However, Microsoft acquired LinkedIn for $26 billion just months later, sparking a sector-wide recovery. Salesforce and others went on to grow significantly over the next five years.
While AI disruption is a more serious challenge, history shows that markets often overreact to technological shifts, and strong companies with competitive moats tend to survive and thrive.
Monday.com is a SaaS company that offers a "work operating system" (Work OS), a flexible digital workspace where teams can plan, track, and manage projects collaboratively in one place. It replaces scattered emails, spreadsheets, and multiple disconnected apps with a single visual platform.
The platform has expanded beyond project management to include products for CRM, sales, software development, IT service management, and marketing—all built on the same underlying platform.
Monday.com serves a wide range of customers, from small startups using self-service options to large Fortune 500 enterprises with thousands of seats. Historically, its sweet spot has been the mid-market, but it is aggressively moving into larger enterprise deals.
Monday.com integrates easily with existing tools, making marketing spend efficient and customer retention high. It is landing larger enterprise contracts where customers build their own internal tools on top of the platform, creating a strong switching cost and moat that AI cannot easily overcome.
Monday.com is investing heavily in AI through its Monday Agent Labs and agent-building tools, turning AI from a threat into a growth opportunity.
Management has set conservative guidance, often leading to the company beating expectations once the market stabilizes.
Despite negative market sentiment and a severely depressed stock price, most analysts still rate Monday.com as a buy, with price targets implying substantial upside.
The company has multiple growth avenues including project management, CRM, developer tools, IT service, and AI products, reducing reliance on any single product for success.
Monday.com combines real business fundamentals, strong cash generation, accelerating enterprise traction, and a deeply undervalued stock price. This creates an asymmetric risk-reward profile that many investors seek.
Medicus Pharma (NASDAQ: MDCX) is developing Skinject, a patented dissolvable micro-needle patch loaded with Docar Rubeson, a chemotherapy agent.
The software sector's recent downturn driven by AI disruption fears appears overblown, with companies like Monday.com demonstrating strong fundamentals, growth, and adaptability. Monday.com represents a compelling investment opportunity with significant upside potential.
Meanwhile, Medicus Pharma is pioneering a novel, less invasive treatment for the most common cancer in the US, offering hope for patients and potential growth for investors willing to accept biotech risks.
Both companies exemplify how innovation and resilience can create value even in challenging market environments.
What are your thoughts on Monday.com and the future of SaaS in the AI era? Do you see Medicus Pharma's approach as a breakthrough in cancer treatment? Share your views and join the conversation.
