AI Will Disrupt Software Companies Rapidly, Says Thoma Bravo Co-Founder
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Source: CNBC
- Market Disruption Warning: Thoma Bravo co-founder Orlando Bravo stated that artificial intelligence will rapidly disrupt many public software companies, and some valuation declines are 'very warranted,' indicating a cautious market outlook for the software sector.
- Valuation Volatility: Software stocks have been hit hard as AI model companies release low-cost alternative services, with the iShares Expanded Tech-Software Sector ETF (IGV) down approximately 28% since last September, reflecting investor concerns about the industry's future.
- Valuation Misjudgment Reflection: Bravo admitted that his firm overestimated Medallia's growth rates during its $6.4 billion acquisition, leading to an inflated purchase price, a mistake that not only impacted Thoma Bravo's investment strategy but also sparked criticism of private equity firms' 'arrogance' in software valuations.
- Future Winners' Potential: Despite the harsh sell-off of certain software companies, Bravo believes these firms will emerge as 'big winners' in the upcoming 'agentic era,' suggesting that the market may have misjudged their potential, leaving room for future rebounds.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy APO?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on APO
Wall Street analysts forecast APO stock price to rise
11 Analyst Rating
10 Buy
1 Hold
0 Sell
Strong Buy
Current: 103.450
Low
136.00
Averages
164.45
High
182.00
Current: 103.450
Low
136.00
Averages
164.45
High
182.00
About APO
Apollo Global Management, Inc. is a global alternative asset manager and a retirement services provider. It operates through three segments: Asset Management, Retirement Services and Principal Investing. The Asset Management segment focuses on three investing strategies: yield, hybrid, and equity. These strategies reflect the range of investment capabilities across its platform based on relative risk and return. The Retirement Services business is conducted by Athene Holding Ltd (Athene), a financial services company that specializes in issuing, reinsuring, and acquiring retirement savings products designed for the increasing number of individuals and institutions seeking to fund retirement needs. Athene product lines include annuities and funding agreements. The Principal Investing segment includes realized performance fee income, realized investment income from its balance sheet investments, and certain allocable expenses related to corporate functions supporting the entire company.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
AI Disrupts Software Company Valuations
- Valuation Decrease Justification: Orlando Bravo, co-founder of Thoma Bravo, stated that many software companies are experiencing warranted valuation declines due to AI disruptions, indicating the market's sensitivity to the impact of AI on traditional software models.
- Acquisition Misstep Reflection: Bravo admitted that his firm overpaid for Medallia in 2021, having overestimated its growth rates, which underscores the importance of risk management in investment decisions and the potential pitfalls of aggressive acquisitions.
- Market Volatility Impact: Software stocks have been severely impacted as AI model companies release tools that threaten to replace traditional services at lower costs, with the iShares Expanded Tech-Software Sector ETF (IGV) down approximately 28% from its all-time high in September, reflecting uncertainty about the software sector's future.
- Unjust Market Reactions: Despite some software companies facing unjustified sell-offs, Bravo noted that these firms are actually “phenomenal businesses” poised to be winners in the upcoming agentic era, suggesting a misjudgment in the market's assessment of certain companies' potential.
See More
Orlando Bravo Responds to Criticism of Private Markets
- Investor Confidence: Orlando Bravo emphasized that Thoma Bravo's investor base, which includes major U.S. pension funds and global sovereign wealth funds, remains confident due to the firm's long track record and transparency, despite increasing scrutiny on private market valuations and liquidity.
- Sector Expertise Advantage: Bravo noted that Thoma Bravo's deep sector expertise in private equity allows its portfolio companies to excel amid the disruptions caused by artificial intelligence in the software industry, particularly highlighting that the performance of its 77 companies significantly exceeds market expectations.
- Market Risk Warning: Morgan Stanley forecasts that direct lending default rates will reach about 8%, nearing pandemic-era peaks, and Bravo acknowledged overpaying for Medallia, admitting that they overestimated the company's future growth, which has impacted investor confidence.
- Public Market Comparison: Bravo highlighted a stark contrast between private equity-owned companies and many publicly traded software firms, which face accelerating disruption from AI, asserting that recent valuation declines in some public companies are
See More
AI Will Disrupt Software Companies Rapidly, Says Thoma Bravo Co-Founder
- Market Disruption Warning: Thoma Bravo co-founder Orlando Bravo stated that artificial intelligence will rapidly disrupt many public software companies, and some valuation declines are 'very warranted,' indicating a cautious market outlook for the software sector.
- Valuation Volatility: Software stocks have been hit hard as AI model companies release low-cost alternative services, with the iShares Expanded Tech-Software Sector ETF (IGV) down approximately 28% since last September, reflecting investor concerns about the industry's future.
- Valuation Misjudgment Reflection: Bravo admitted that his firm overestimated Medallia's growth rates during its $6.4 billion acquisition, leading to an inflated purchase price, a mistake that not only impacted Thoma Bravo's investment strategy but also sparked criticism of private equity firms' 'arrogance' in software valuations.
- Future Winners' Potential: Despite the harsh sell-off of certain software companies, Bravo believes these firms will emerge as 'big winners' in the upcoming 'agentic era,' suggesting that the market may have misjudged their potential, leaving room for future rebounds.
See More
Apollo Global Management Shareholder Class Action Notice
- Lawsuit Background: Shareholders of Apollo Global Management (NYSE:APO) who purchased shares between May 10, 2021, and February 21, 2026, are encouraged to contact the Gross Law Firm regarding potential legal claims, indicating significant legal exposure for the company.
- Allegation Details: The complaint alleges that executives at Apollo Global frequently communicated with Jeffrey Epstein in the 2010s, contradicting the company's claims of no business dealings with him, which has severely harmed the company's reputation.
- Shareholder Action Steps: Shareholders must register by May 1, 2026, to participate in the class action, and upon registration, they will receive updates on the case's progress, ensuring their rights are protected throughout the litigation process.
- Law Firm Overview: The Gross Law Firm is a nationally recognized class action firm committed to protecting investors who have suffered losses due to corporate misconduct, emphasizing the need for companies to adhere to responsible business practices.
See More
ICE Launches Private Credit Intelligence with Apollo as Anchor Partner
- Market Transparency Enhancement: On Tuesday, ICE launched ICE Private Credit Intelligence, aiming to significantly improve transparency in the private credit market by establishing a data infrastructure layer consistent with public credit markets, thereby providing customers with a clearer market view.
- Partnership Dynamics: The launch is supported by Apollo as an anchor partner, whose involvement not only enhances ICE's expertise in the private credit space but also provides robust data science support to help address critical challenges in the market.
- Data Science Integration: Chris Edmonds, President of ICE Fixed Income and Data Services, stated that by leveraging ICE's vast data science expertise alongside Apollo's industry experience, the new service will create new opportunities for customers, driving innovation and growth in the private credit market.
- Market Opportunities: The introduction of ICE Private Credit Intelligence comes at a time of rising demand for transparency in the private credit sector, which is expected to attract more investor interest in this area, further enhancing ICE's competitiveness in the financial services industry.
See More
Peloton Expands Commercial Market with New Products
- Peloton Product Launch: Peloton has announced new Bike and Tread products aimed at busy gyms, marking an expansion of its commercial business that is expected to enhance its market share in the fitness industry.
- NVIDIA Order Surge: CEO Jensen Huang stated that NVIDIA anticipates $1 trillion in orders over the next year, doubling last year's projections, indicating strong demand in the AI chip market that could drive stock price increases.
- Oil Price Volatility: Oil prices fluctuated as President Trump plans to form an international coalition to protect tanker traffic in the Strait of Hormuz, raising concerns about future supply chain stability that may impact operational costs for related businesses.
- Amazon Delivery Speed Enhancement: Amazon announced three-hour delivery in 2,000 U.S. cities, with one-hour delivery available in hundreds of locations, reflecting the company's ongoing investment in same-day delivery, which is expected to boost customer satisfaction and market competitiveness.
See More
AI Disrupts Software Company Valuations
- Valuation Decrease Justification: Orlando Bravo, co-founder of Thoma Bravo, stated that many software companies are experiencing warranted valuation declines due to AI disruptions, indicating the market's sensitivity to the impact of AI on traditional software models.
- Acquisition Misstep Reflection: Bravo admitted that his firm overpaid for Medallia in 2021, having overestimated its growth rates, which underscores the importance of risk management in investment decisions and the potential pitfalls of aggressive acquisitions.
- Market Volatility Impact: Software stocks have been severely impacted as AI model companies release tools that threaten to replace traditional services at lower costs, with the iShares Expanded Tech-Software Sector ETF (IGV) down approximately 28% from its all-time high in September, reflecting uncertainty about the software sector's future.
- Unjust Market Reactions: Despite some software companies facing unjustified sell-offs, Bravo noted that these firms are actually “phenomenal businesses” poised to be winners in the upcoming agentic era, suggesting a misjudgment in the market's assessment of certain companies' potential.
See More
Orlando Bravo Responds to Criticism of Private Markets
- Investor Confidence: Orlando Bravo emphasized that Thoma Bravo's investor base, which includes major U.S. pension funds and global sovereign wealth funds, remains confident due to the firm's long track record and transparency, despite increasing scrutiny on private market valuations and liquidity.
- Sector Expertise Advantage: Bravo noted that Thoma Bravo's deep sector expertise in private equity allows its portfolio companies to excel amid the disruptions caused by artificial intelligence in the software industry, particularly highlighting that the performance of its 77 companies significantly exceeds market expectations.
- Market Risk Warning: Morgan Stanley forecasts that direct lending default rates will reach about 8%, nearing pandemic-era peaks, and Bravo acknowledged overpaying for Medallia, admitting that they overestimated the company's future growth, which has impacted investor confidence.
- Public Market Comparison: Bravo highlighted a stark contrast between private equity-owned companies and many publicly traded software firms, which face accelerating disruption from AI, asserting that recent valuation declines in some public companies are
See More
AI Will Disrupt Software Companies Rapidly, Says Thoma Bravo Co-Founder
- Market Disruption Warning: Thoma Bravo co-founder Orlando Bravo stated that artificial intelligence will rapidly disrupt many public software companies, and some valuation declines are 'very warranted,' indicating a cautious market outlook for the software sector.
- Valuation Volatility: Software stocks have been hit hard as AI model companies release low-cost alternative services, with the iShares Expanded Tech-Software Sector ETF (IGV) down approximately 28% since last September, reflecting investor concerns about the industry's future.
- Valuation Misjudgment Reflection: Bravo admitted that his firm overestimated Medallia's growth rates during its $6.4 billion acquisition, leading to an inflated purchase price, a mistake that not only impacted Thoma Bravo's investment strategy but also sparked criticism of private equity firms' 'arrogance' in software valuations.
- Future Winners' Potential: Despite the harsh sell-off of certain software companies, Bravo believes these firms will emerge as 'big winners' in the upcoming 'agentic era,' suggesting that the market may have misjudged their potential, leaving room for future rebounds.
See More
Apollo Global Management Shareholder Class Action Notice
- Lawsuit Background: Shareholders of Apollo Global Management (NYSE:APO) who purchased shares between May 10, 2021, and February 21, 2026, are encouraged to contact the Gross Law Firm regarding potential legal claims, indicating significant legal exposure for the company.
- Allegation Details: The complaint alleges that executives at Apollo Global frequently communicated with Jeffrey Epstein in the 2010s, contradicting the company's claims of no business dealings with him, which has severely harmed the company's reputation.
- Shareholder Action Steps: Shareholders must register by May 1, 2026, to participate in the class action, and upon registration, they will receive updates on the case's progress, ensuring their rights are protected throughout the litigation process.
- Law Firm Overview: The Gross Law Firm is a nationally recognized class action firm committed to protecting investors who have suffered losses due to corporate misconduct, emphasizing the need for companies to adhere to responsible business practices.
See More
ICE Launches Private Credit Intelligence with Apollo as Anchor Partner
- Market Transparency Enhancement: On Tuesday, ICE launched ICE Private Credit Intelligence, aiming to significantly improve transparency in the private credit market by establishing a data infrastructure layer consistent with public credit markets, thereby providing customers with a clearer market view.
- Partnership Dynamics: The launch is supported by Apollo as an anchor partner, whose involvement not only enhances ICE's expertise in the private credit space but also provides robust data science support to help address critical challenges in the market.
- Data Science Integration: Chris Edmonds, President of ICE Fixed Income and Data Services, stated that by leveraging ICE's vast data science expertise alongside Apollo's industry experience, the new service will create new opportunities for customers, driving innovation and growth in the private credit market.
- Market Opportunities: The introduction of ICE Private Credit Intelligence comes at a time of rising demand for transparency in the private credit sector, which is expected to attract more investor interest in this area, further enhancing ICE's competitiveness in the financial services industry.
See More
Peloton Expands Commercial Market with New Products
- Peloton Product Launch: Peloton has announced new Bike and Tread products aimed at busy gyms, marking an expansion of its commercial business that is expected to enhance its market share in the fitness industry.
- NVIDIA Order Surge: CEO Jensen Huang stated that NVIDIA anticipates $1 trillion in orders over the next year, doubling last year's projections, indicating strong demand in the AI chip market that could drive stock price increases.
- Oil Price Volatility: Oil prices fluctuated as President Trump plans to form an international coalition to protect tanker traffic in the Strait of Hormuz, raising concerns about future supply chain stability that may impact operational costs for related businesses.
- Amazon Delivery Speed Enhancement: Amazon announced three-hour delivery in 2,000 U.S. cities, with one-hour delivery available in hundreds of locations, reflecting the company's ongoing investment in same-day delivery, which is expected to boost customer satisfaction and market competitiveness.
See More
