Orlando Bravo Says Software Is Oversold. He's Right, But Not for the Reason You Think.
Thoma Bravo's Orlando Bravo says software stocks are oversold and domain expertise is the real moat. Here's why his investment thesis is actually a GTM argument most founders are missing.
By Dan Frohnen | Published February 12, 2026
Orlando Bravo Says Software Is Oversold. He's Right, But Not for the Reason You Think.
Orlando Bravo, co-founder of Thoma Bravo, went on CNBC's Money Movers today and said something that most people will hear as an investment call. It's not. It's a GTM argument.
His point: software stocks are oversold. The WisdomTree Cloud Computing Fund is down over 32% in the past year. Salesforce, ServiceNow, and Adobe are all down double digits in 2026. The market is treating all software the same, punishing the entire sector on the assumption that AI will replace it.
Bravo's response was blunt. "Most of these 300 publicly traded software companies, they don't have enough profits. They trade as a multiple of revenue, and that's very, very dangerous."
But then he said the thing that matters for founders: "There's some jewels in the public markets right now that are worth so much, that have 30 years of domain expertise built into their product. And those companies are really, really cheap right now."
His managing partner Holden Spaht said it even more directly on Bloomberg today: "To think that all software is the same, they're missing the mark a bit."
This is coming from the firm that's done over 600 software acquisitions with $181 billion under management. They're not guessing. They're buying.
The Investment Thesis Is a Category Positioning Argument
Here's what most people will miss about Bravo's comments. He's not making a stock market call. He's making a structural argument about what makes software companies defensible.
At Davos last month he put it plainly: "Software is not at all about the code or about the technology. Software is about your domain knowledge. Most software companies know a specific vertical, a specific process, a specific function so well that there are three to five companies in the world that know it, and about 20 individuals in the world that really, really know it. That is the franchise. That is the value. That is what you cannot replicate."
Read that again. The franchise isn't the code. It's not the features. It's not the AI layer. It's the accumulated understanding of a specific domain that took years to build and can't be replicated by a competitor with better technology.
He also noted that AI-generated code is innovating faster than expected, but it doesn't replace what R&D teams actually do. "About 80% of what those people do have nothing to do with writing code."
This is the category positioning argument, stated by one of the most successful software investors in history.
Why This Matters for Founders
The software selloff is being driven by a market that can't distinguish between companies with real structural advantages and companies that are just selling features. That's a market-level version of the same problem I see with founders every week.
Most B2B SaaS companies position themselves on what their product does. Features, capabilities, integrations. When a competitor ships the same feature (or an AI tool makes it trivial), that positioning collapses.
The companies Bravo is buying are the ones that positioned on something deeper: domain expertise so specific that it becomes the operating system for how an industry works. Thoma Bravo's recent acquisitions tell the story. Dayforce ($12.3 billion) owns HR and payroll workflows. Jeppesen ForeFlight ($10.55 billion) owns aviation operations. These aren't feature-based companies. They're category owners.
The companies getting punished in the selloff are the ones without that depth. KeyBanc's analysis flagged seat-based application companies like Monday.com, Asana, and Sprout Social as the most exposed. The common thread: they haven't become systems of record, and they haven't anchored themselves in domain-specific workflows that are hard to displace.
Structural Advantages Beat Execution Advantages
This is the same pattern that shows up in the vertical SaaS data. Companies with deep domain focus build structural advantages that compound over time. Companies without it are competing on features and price, which means they're always one AI breakthrough away from commoditization.
Bravo's thesis and the vertical SaaS thesis are the same argument at different scales. Domain specificity creates category ownership. Category ownership creates defensibility. Defensibility creates the kind of business that survives a market-wide selloff while competitors get acquired at a discount.
For founders building right now, the question isn't whether AI will disrupt software. It will. The question is whether your company is positioned around domain expertise deep enough that AI makes you more valuable, not less.
The companies where AI is a tailwind are the ones that already own their category. The companies where AI is a threat are the ones that never established what category they own in the first place.
Build for position, not volume. The software companies that survive this cycle will be the ones that understood that before the market forced them to.
Want to discuss how this applies to your business? Book a call or reach out at FrohnenGTM.com.