For the last few months, the market convinced everyone that open-source AI was going to code enterprise software out of existence, and everyone panic-sold. Q1 earnings just proved that was a complete lie. The SaaS giants aren't dying, they're monetizing AI. The capital rotation back into these beaten-down names is happening now, albeit a too late on some tickers.
Here is how I'm playing rotation:
- NOW (ServiceNow) — Already in play: The stock is ripping today and last week They proved their AI "Now Assist" is printing money. The smart money is already loading the boat, so the easy money has already been made. I'm in with shares - don't want to buy options on inflated IV.
- CRM (Salesforce) — Lagging NOW slightly, but following the pattern: They just posted $1.2B in Agentforce ARR, proving the "seat death" narrative was a complete joke. It’s moving today and last Friday but it lags the movement NOW has had. I'm in with shares & a call spread on $190 and $220 strikes & Jan2027 expiry.
- TRI (Thomson Reuters) — The Sleeper: This is the actual play. The market still thinks general AI will kill legal and financial data. In highly regulated sectors, an AI hallucination gets you sued. Institutions are paying massive premiums for TRI's verified, "fiduciary-grade" AI. They just posted a massive Q1 beat with 42% margins, and the technicals are flashing a massive buy signal. I'm in with shares.
The Move: NOW is running, CRM is following behind, and TRI is the smart move that just started moving today.
Warning on TRI: The options chain is an absolute roach motel right now. The bid-ask spreads will eat your portfolio. Do not buy the calls. Buy the shares outright. Collect the dividend while the broader market wakes follows.