Observed Signal · Feb 11, 2026 · Financial Commentary · Source: CNBC Technology · Impact: 2/5 · Sentiment: Neutral
Orlando Bravo: Software Stocks Oversold, Profits Needed
Thoma Bravo co-founder Orlando Bravo said software stocks are "oversold," arguing that many publicly traded software companies lack sufficient profits and therefore trade as risky revenue multiples. He noted that artificial intelligence is accelerating code creation but cannot fully replace broader R&D functions, and that domain-expert software businesses are currently undervalued. Thoma Bravo, founded in 2008, had over $181 billion in assets under management as of September and has recently acquired talent platform Dayforce for $12.3 billion and aviation software Jeppesen ForeFlight for $10.55 billion.
Comments from a major software-focused investor on profitability and AI's impact provide market perspective and highlight acquisition activity, but this is investor commentary rather than a major platform policy change or technical release.
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Key Takeaways & Evidence Grounding
- Orlando Bravo said most of about 300 publicly traded software companies do not have enough profits and often trade as a multiple of revenue.
- Thoma Bravo was founded in 2008 and had over $181 billion in assets under management as of September.
- Thoma Bravo's recent acquisitions include Dayforce for $12.3 billion and Jeppesen ForeFlight for $10.55 billion.
- Bravo stated that AI is accelerating code generation but cannot fully replace non-coding R&D work, estimating roughly 15% of R&D could be affected versus about 80% of R&D being non-coding tasks.
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AI Disruption Justifies Valuation Cuts, Says Orlando Bravo
Thoma Bravo co-founder Orlando Bravo said at the firm's investor meeting that artificial intelligence will accelerate disruption of many public software companies and that some recent valuation declines are justified. He also said some software businesses were unfairly punished and could emerge as winners in the "agentic era." Bravo did not identify specific companies. He acknowledged his firm overestimated growth at Medallia, leading to an overly high purchase price in the 2021 $6.4 billion acquisition. The firm had over $183 billion in assets under management across 77 companies as of December.
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