CROSS-CATEGORY: Market Bifurcation — $2T Wiped from Small/Mid SaaS While Large-Cap Giants Stage 'Spring Awakening' Rally

SaaStr·high signal

The SaaS market is splitting into two realities. On one side: IGV down 24% in Q1 (worst since 2008), software trading at an S&P 500 discount for the first time ever, Israeli SaaS (Nice, Monday.com, Wix) losing tens of percent, and 70% of providers admitting AI costs eat profitability. On the other: Salesforce Agentforce at $800M ARR, ServiceNow Now Assist at $1B trajectory, Goldman Sachs survey showing 49% of allocators increasing software exposure (highest since 2017), and $55B in combined buybacks. The winners monetized AI as labor replacement; the losers still sell seats to humans who are being replaced.