      Meritech · 2024-10-31
      · 581d
    

2024 Market Update: Public Markets, Private Markets, and AI's Impact on Software

Meritech's 2024 market analysis reveals that while equity markets are at peak levels driven by AI and tech leaders, public SaaS multiples remain below historical norms despite market leader strength. Venture funding is stabilizing above 2019 levels with AI investments driving new unicorn creation, while questions persist about SaaS viability amid the AI platform shift.

10 metrics· Cited 0× in the knowledge base ·Open source ↗

Metrics in this report

Individual AI Company Stock Performance

75-845%

range

Start of 2023 to October 14, 2024

Market Value Weighting: Growth vs FCF

3ratio

single

Street values growth over FCF by 3:1

Median Public SaaS NTM Revenue Multiple

6.0x

median

Current as of October 14, 2024

Meta Share Price Performance

391%

single

Start of 2023 to October 14, 2024

NVIDIA Share Price Performance

845%

single

Start of 2023 to October 14, 2024

S&P 500 AI/Tech Company Market Cap Concentration

21-34%

range

Nine companies from Jan 2023 to Oct 2024

S&P 500 Companies Mentioning AI in Earnings

81%

median

Q2 2024 earnings calls

SaaS Multiple Compression 2022

70-80%

range

Peak to trough compression in major market correction

SaaS Valuation Premium by Growth Rate

75%

premium

20-30% growth vs <10% growth companies with similar Rule of 40

Top 10 SaaS Companies NTM Revenue Multiple

12.2-40.0x

range

Top 10 median highest-valued SaaS companies