When the Market Questions Relevance

The SaaS market in early 2026 is experiencing a significant correction driven by investor concerns about product relevance in an AI-dominated landscape, not valuation concerns. Unlike the 2016 SaaS crash which reversed quickly after weak guidance, the current selloff reflects fundamental questions about whether traditional software remains essential as AI capabilities expand. Growth rate has become the primary determinant of stock performance, with companies growing below 20% declining sharply while high-growth companies remain resilient.