– Andrew Macken
February continued 2026’s challenging start with stocks of many varieties declining during the month.
Software stocks, particularly, continued to sell off – in what’s been dubbed the ‘SaaS apocalypse’ – amid fears AI agents will make traditional software and the human employees who currently pay for it obsolete. Financials, too, were punished over fears of disruption and second-order credit risks.
As a result, Montaka’s portfolio experienced declines during February, with the largest portfolio detractors being KKR, Amazon, Blackstone, Unity Software, Meta and Microsoft. These losses were only partially offset by positive performances by Floor & Decor as well as newer investments in Albemarle, TSMC and BAE Systems.
To be clear, we believe there is a pronounced dislocation between market prices and intrinsic values. The recent volatility and share price declines do not, in our view, reflect the fundamental financial strength and competitive advantages of Montaka’s investee companies, which remain exceptionally robust.
When the market eventually reconciles this gap – as fundamental earnings power historically dictates – we expect the subsequent re-rating of Montaka’s portfolio to be both rapid and substantial.
In this month’s Spotlight Series podcast, ‘The News is Bad and the Facts are Good’, Andy sits down with Senior Analysts, Lachlan Mackay and Tim Le, to discuss the recent financial results reported by companies like Amazon, Meta, Spotify, REA, and DoorDash.
Despite their short-term stock price declines, across the board the financial results were fantastic and the competitive positions of these businesses continue to strengthen.
In the long term, it is fundamental earnings power that drives stock prices, and that’s what we continue to remain focused on.
In ‘The other side of the SaaS Apocalypse’, we explain why we believe the market’s imagination has lost touch with reality. The savage sell-off of the SaaS-pocalypse has been caused by several fundamental misunderstandings of the real world, in our view.
Firstly, code itself has never been the competitive advantage of enterprise software platforms like Microsoft, Salesforce and ServiceNow. Rather, it’s their scaled distribution into enterprise – an enormous competitive barrier that will remain in any AI-agentic world. Secondly, there simply won’t be enough electric power in the US for this world to exist any time soon (agentic-AI is much more compute-intensive than chatbot-AI). We discuss these ideas in more detail in recent weeks in our Spotlight Series podcast: ‘The SaaS Apocalypse: Why the market got it wrong’.
And, thirdly, the very nature of security in an AI-agentic world also undermines the SaaS apocalypse hypothesis, in our view. In ‘AI Agents: The Smartest Employees You Can’t (Fully) Trust’, Andy shines a light on AI safety research, a topic the investment community substantially underappreciates.
This piece explores how AI models not only have increasing powers of deception, but they are easily deceived themselves. And perhaps most alarmingly, creating backdoors in AI models through training data ‘poisoning’ is trivially easy. This means that AI safety for enterprises and governments is an operational challenge, not a model-training one.
The companies that succeed will be those who deploy agents with strict data and tooling permissions and proactive oversight, rather than relying on the model’s base programming for security. This is the exact strategy being pursued by the likes of Salesforce, ServiceNow and Microsoft – and it’s a key reason why we believe their recent sell-off in the SaaS apocalypse was unjustified.
We continue to stick to our process of assessing competitive advantages and company valuations from first principles amidst a period of heightened uncertainty, following the latest armed intervention of Iran.
Sincerely,
Andrew Macken
Podcast: Join the Montaka Global Investments team on Spotify as we share real-time examples and investing tips that govern our stockpicks. Click below to listen. Alternatively, click on this link: https://podcasters.spotify.com/pod/show/montaka
Andrew Macken is the Chief Investment Officer at Montaka Global Investments.
Update from the PM – March 2026
– Andrew Macken
February continued 2026’s challenging start with stocks of many varieties declining during the month.
Software stocks, particularly, continued to sell off – in what’s been dubbed the ‘SaaS apocalypse’ – amid fears AI agents will make traditional software and the human employees who currently pay for it obsolete. Financials, too, were punished over fears of disruption and second-order credit risks.
As a result, Montaka’s portfolio experienced declines during February, with the largest portfolio detractors being KKR, Amazon, Blackstone, Unity Software, Meta and Microsoft. These losses were only partially offset by positive performances by Floor & Decor as well as newer investments in Albemarle, TSMC and BAE Systems.
To be clear, we believe there is a pronounced dislocation between market prices and intrinsic values. The recent volatility and share price declines do not, in our view, reflect the fundamental financial strength and competitive advantages of Montaka’s investee companies, which remain exceptionally robust.
When the market eventually reconciles this gap – as fundamental earnings power historically dictates – we expect the subsequent re-rating of Montaka’s portfolio to be both rapid and substantial.
In this month’s Spotlight Series podcast, ‘The News is Bad and the Facts are Good’, Andy sits down with Senior Analysts, Lachlan Mackay and Tim Le, to discuss the recent financial results reported by companies like Amazon, Meta, Spotify, REA, and DoorDash.
Despite their short-term stock price declines, across the board the financial results were fantastic and the competitive positions of these businesses continue to strengthen.
In the long term, it is fundamental earnings power that drives stock prices, and that’s what we continue to remain focused on.
In ‘The other side of the SaaS Apocalypse’, we explain why we believe the market’s imagination has lost touch with reality. The savage sell-off of the SaaS-pocalypse has been caused by several fundamental misunderstandings of the real world, in our view.
Firstly, code itself has never been the competitive advantage of enterprise software platforms like Microsoft, Salesforce and ServiceNow. Rather, it’s their scaled distribution into enterprise – an enormous competitive barrier that will remain in any AI-agentic world. Secondly, there simply won’t be enough electric power in the US for this world to exist any time soon (agentic-AI is much more compute-intensive than chatbot-AI). We discuss these ideas in more detail in recent weeks in our Spotlight Series podcast: ‘The SaaS Apocalypse: Why the market got it wrong’.
And, thirdly, the very nature of security in an AI-agentic world also undermines the SaaS apocalypse hypothesis, in our view. In ‘AI Agents: The Smartest Employees You Can’t (Fully) Trust’, Andy shines a light on AI safety research, a topic the investment community substantially underappreciates.
This piece explores how AI models not only have increasing powers of deception, but they are easily deceived themselves. And perhaps most alarmingly, creating backdoors in AI models through training data ‘poisoning’ is trivially easy. This means that AI safety for enterprises and governments is an operational challenge, not a model-training one.
The companies that succeed will be those who deploy agents with strict data and tooling permissions and proactive oversight, rather than relying on the model’s base programming for security. This is the exact strategy being pursued by the likes of Salesforce, ServiceNow and Microsoft – and it’s a key reason why we believe their recent sell-off in the SaaS apocalypse was unjustified.
We continue to stick to our process of assessing competitive advantages and company valuations from first principles amidst a period of heightened uncertainty, following the latest armed intervention of Iran.
Sincerely,
Andrew Macken
Podcast: Join the Montaka Global Investments team on Spotify as we share real-time examples and investing tips that govern our stockpicks. Click below to listen. Alternatively, click on this link: https://podcasters.spotify.com/pod/show/montaka
Andrew Macken is the Chief Investment Officer at Montaka Global Investments.
This content was prepared by Montaka Global Pty Ltd (ACN 604 878 533, AFSL: 516 942). The information provided is general in nature and does not take into account your investment objectives, financial situation or particular needs. You should read the offer document and consider your own investment objectives, financial situation and particular needs before acting upon this information. All investments contain risk and may lose value. Consider seeking advice from a licensed financial advisor. Past performance is not a reliable indicator of future performance.
Related Insight
Share
Get insights delivered to your inbox including articles, podcasts and videos from the global equities world.