Where to next after the SaaSpocalypse snapback?

The software sell-off has begun to reverse, but the next phase will reward companies with durable customer relationships, pricing power, switching costs and cash generation rather than the sector indiscriminately.

• By February 2026, Australian technology shares had fallen more than 30% from their late-2025 peak, while the iShares Expanded Tech-Software Sector ETF had risen 45% from its April low by July and August.
• Catapult’s shares jumped about 30% after its May results showed stronger growth and positive cash generation, while Bravura raised expected 2026 cash profit from A$69m–A$73m to about A$77m and later proposed a A$50m buyback.
• Forager’s Australian software exposure increased from 3% of the portfolio at the start of 2026 to 16% by June; the Australian Shares Fund returned 5.3% in July and a further 1.8% in August.
• Japanese holdings contributed about 3% to the International Shares Fund’s 5.0% July return, led by OBIC Business Consultants, which gained 32% after reporting 18% profit growth and raising prices for its cloud accounting software.
• Sage Group delivered its fifth consecutive quarter of accelerating organic revenue growth, with its shares rising from £8.92 on 1 May to £10.92 on 28 August, while other holdings remained weak: Visional was still 23% below its high, Readytech about 37% lower for the year, and Catapult had eased to A$3.10–A$3.20.

Takeaway: The easiest gains may already have been made in US and Japanese software, but opportunities remain in businesses whose operating results contradict depressed valuations; investors should expect volatility and distinguish genuine AI resilience from stocks already priced for exceptional growth.