Here’s one view from Google Cloud’s chief technology officer Will Grannis: “It is still early days when it comes to cloud adoption, with only 10-15% of enterprise IT spending and 20-30% of workflows moved to the cloud.”
Of course, not all SaaS stocks are created equal. Some are total duds. But many—which have business models with reasonable long-term bull cases—are trading at (or below) their valuations right before the pandemic: Docusign Inc., Paypal Holdings Inc., Salesforce Inc., Workday Inc. and Zoom Video Communications Inc.
Digital transformation remains a tailwind for these companies. We need to check in again a few Mays from now to see how they are really doing.
Trung Phan is the co-host of the Not Investment Advice podcast and writes the SatPost newsletter. He was formerly the lead writer for the Hustle, a tech newsletter.