Scott Denne has covered the intersection of technology and capital markets for his entire career. In late 2023, Scott began his second tour at 451 Research from S&P Energy Horizons, where he covers acquisitions, valuation trends and private equity investments. His research explores changes in dealmaking and shifts in valuation. His reports cover broad movements in the tech M&A markets, private-equity investments, analysis of specific deals and forecasts of deal activity in multiple sectors of the software industry. Previously, Scott spent two years as Director of Technology Research for BWG Strategy. In that role, Scott provided primary research to buyside equity investors through a mix of surveys and moderated group discussions. The coverage was built around collecting spend intention, sentiment and budget outlook from customers and channel partners across a universe of 50+ enterprise software tickers. Prior to an eight-year stint as an M&A analyst with 451 Research, Scott was a reporter covering startups and venture capital for several Dow Jones publications, including VentureWire, Private Equity Analyst and The Wall Street Journal. He has been quoted by financial and technology publications, including TheStreet.com, Wired, CNBC.com, AdExchanger and CMSwire.
The perception that AI represents an existential threat to enterprise software sent those stocks spiraling downward in February. At the time, many believed the negative sentiment across the category would give way to a sorting of the potential winners and losers of the AI era. Two months later, that hasn't happened.
As investors debate whether AI is an existential threat to the business of software, AI is also making it more expensive for software companies to win new business. The introduction of large language models has blown up the go-to-market strategies that served the SaaS sector in the recent past.
Software companies spent the past year or so talking about how great AI would be for business. The talk, however, didn't translate into unexpected gains to the top line. For the most part, Wall Street's outlook for software sales finished the year right where it started.
Impatience turned to abandonment this week as investors fled software stocks. Already weary of waiting for advancements in generative AI to reaccelerate growth, Wall Street pummeled shares of SaaS companies following a series of signals that stoked fears that GenAI could cause an extensive purge of established enterprise software vendors.
Yesterday's trends aren't holding up in today's IPO market. The uptick in new tech offerings suggests that it's getting easier to go public. The aftermarket performance, however, indicates that investors have a narrow set of interests.
Venture exits are back, but not evenly distributed. Tech investors hit near-record levels of liquidity in the M&A market last year — a trend that has continued in the early days of 2026. Today's acquisition of Brex, however, shows that even outsized outcomes aren't delivering strong returns to late-stage investors. And that could ultimately weigh on funding for the current crop of AI startups that can't live without it.
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