On My Radar: The SaaS-ageddon Attack
February 6, 2026
By Steve Blumenthal
“The viral moment for Anthropic’s models is the most important thing that’s happened in AI since ChatGPT’s launch.”
- Dean Ball
Senior fellow at the Foundation for American Innovation. Source: WSJ
It was a surprise attack no one saw coming. ClaudeAI fired a missile. It hit its mark. The Wall Street Journal summed it up: “The Week Anthropic Tanked the Market and Pulled Ahead of Its Rivals.”
Anthropic is the company behind the popular ClaudeAI tool. Analysts are calling it Saas-ageddon. This is exciting, way cool, and extremely disruptive.
Anthropic competes with ChatGPT and Grok and appears to have leapfrogged both, for now, in the race for AI supremacy. And the news upended the stock market this week.
From the WSJ,
“A simple set of industry-specific add-ons to its Claude product, including one that performed legal services, triggered a dayslong global stock selloff, from software to legal services, financial data and real estate. Then, Anthropic unveiled Super Bowl ads that taunt rival OpenAI.”
Grab that coffee, and find your favorite chair. “SaaS-ageddon” (a riff on Armageddon) is analyst shorthand for a prolonged shake-out in the Software-as-a-Service industry. It’s catchy and a little dramatic. But the concerns underneath it are real.
The focus for investors is the impact on earnings. This is a disruptive gut punch to the largest single sector in the U.S. stock market. Today, let’s take a look at why this matters.
On My Radar: ClaudeAI’s SaaS-Ageddon Attack
Personal Note: Super Bowl, Florida, and Park City
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SaaS-ageddon and Market Valuations
Given near-record-high stock market valuations, it is important to consider the potential impact on tech’s overall earnings. Why?
This is material, since Information Technology accounts for ~36% of the S&P 500’s total market cap. Source: Stockcharts.com
If the technology sector's earnings decline, it would likely affect the S&P 500's overall earnings, making it harder to support current record-high valuations.
To give you a sense for how technology exposure has grown since 2010, a decade ago, tech’s share was substantially smaller, meaning its rise and earnings growth have been a major driver of index performance and concentration trends over the last ten years. The following is based on data from BlackRock:
Year-EndTech % of S&P 500 (approximates)
2010 ~14 to 15%
2011 ~15 to 16%
2012 ~16 to 17%
2013 ~18 to 19%
2014 ~20%
2015 ~21 to 22%
2016 ~22 to 23%
2017 ~23 to 24%
2018 ~22 to 23%
2019 ~25 to 26%
2020 ~27 to 28%
2021 ~30%
2022 ~30 to 32%
2023 ~30 to 33%
2024 ~31 to 34%
2025 *~34 to 36% (recent estimates ²Reuters)
* Data through late 2025 reflects the tech sector’s highest market-cap weighting in years.
Broader measures that include tech-oriented companies outside the pure tech sector (e.g., some in Communication Services and Consumer Discretionary that are tech-centric) imply a larger effective tech influence, often over ~40% of the S&P 500.
This is especially important because the S&P 500 accounts for roughly 70%–80% of the U.S. equity market. Because the S&P 500 comprises the bulk of U.S. stock market value, technology accounts for roughly 35-40% of total U.S. stock market capitalization. Source: Reuters
The point is that earnings growth in the tech sector materially affects the valuation of the S&P 500 index. Because the exposure is so large, a wobble in tech earnings impacts the market's performance and your 401(k).
The impact on the market since the January 30, 2026 announcement through February 5, 2026: the S&P 500 index is down 2.6%, while popular SaaS companies are down more:
Adobe -7.6%
Workday - 9.1%
Salesforce -11.3%
Intuit - 13.5%
The Wall Street Journal added,
“Anthropic’s tools, which include so-called agents that can act autonomously to carry out increasingly complex user requests for hours, have offered a preview of the threat sophisticated AI models pose to entire companies. The startup has fought its way to the forefront of the AI conversation with a novel strategy focused on safety, software engineering, and business customers.
The result: a broader business reckoning that has left corporate leaders asking what it will mean when an AI system can easily replicate expertise developed over a lifetime of coding or, in the case of companies, years of corporate development.
Tech titans such as Nvidia Chief Executive Officer Jensen Huang and others have warned that the correction is an overreaction, because many platforms are far more complex and intricate than spinning up simple websites and apps. Many companies also give priority to investing in their businesses rather than building internal software tools, analysts have said.
Still, tech giants including Microsoft, Amazon.com, Meta Platforms, Oracle and Alphabet’s Google are planning more than $600 billion in 2026 capital spending, an amount that approaches the 2026 spending budget of Japan and exceeds that of Germany and Mexico. Anthropic—and all the ways the world might use its tools—are crucial drivers of that spending.” Source: WSJ
All of a sudden, what looked like steady earnings growth for the largest segments in the S&P 500 Index, technology, is now in question. Think of this in light of near-record-high stock market valuations.
The salient point is that the Information Technology sector's current weighting has approached levels not seen since the dot-com era mania.
Following is a look at several popular valuation metrics I share with you frequently:
Chart 1: Shiller PE
Compare the red dot far right (today’s valuation) to the 2000 tech bubble top, the 1966, and the 1929 secular bull market peaks.
Source: ShillerPE, cmgprivatewealth.com
Chart 2: NDR’s Median PE
The median is the stock in the middle of the pack among the 500 stocks in the S&P 500 index. I like this measure for setting actual targets.
For example, as of January month-end, Median PE, based on nearly 62 years of monthly data, is 18, implying a Median Fair Value of ~4,635.27.
Median Fair Value is highlighted in yellow. It will take a 33.2% from the January 31, 2026, market close to get us there.
Note: This is not a cap-weighted valuation process. It does not weigh for Information Tech nor other sectors. It simply ranks all 500 stocks by PE and identifies the PE of the 250th-ranked company. The one in the middle.
Source: NDR, cmgprivatewealth.com
Chart 3: Total Market Cap to GDP
Blue line - upper right. A record 219.2%
Compare today’s number vs. 12-31-2021, 3-31-2000, 11-30-1968 and 8-31-1929
Source: NDR, cmgprivatewealth.com
Final thoughts: The story this week is about ClaudeAI’s new tool and how it is likely to affect the earnings potential of other Software-as-a-Service businesses and, more broadly, the technology sector’s overall earnings growth.
For example, my firm pays Salesforce over $65,000 per year for 15 licenses. Salesforce is a database we use for customer relationship management (CRM).
Imagine, to my delight, an advanced software tool that accomplishes much of what I need at a fraction of the cost. That is what ClaudeAI’s newest software promises. A disruptive technology that will impact the pricing power and earnings potential of current players. There will be winners and losers. The question for investors in light of the richly valued market is the impact on prices.
My two cents: This is not the end of SaaS. It’s the end of easy SaaS, and it could trigger a market reversal to more attractive valuations.
We’re likely moving from: “Grow fast, lose money, raise again” to“Grow reasonably, generate cash, prove durability.”
The views are Steve Blumenthal’s and subject to change. Not a recommendation to buy or sell any security. Please note that the information provided is not recommended for buying or selling any security and is provided for discussion purposes only. Current viewpoints are subject to change. Please note that the information provided is not recommended for buying or selling any security and is provided for discussion purposes only. See important CMG disclosures below.
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Trade Signals: February 5, 2026 Update
Trade Signals Sections:
Market Commentary
The Indicators Dashboard - Stocks, Investor Sentiment, Bonds, Commodities, Currencies, and Gold
Valuations and Subsequent 10-year Returns
Supporting Charts with Explanations
Why Trend Following Matters
Market Commentary - A plain-English snapshot of what changed this week, and what matters most beneath the surface.
The Indicators Dashboard - A consolidated view of key technical signals across equities, investor sentiment, bonds, commodities, currencies, and gold.
Valuations and Subsequent 10-Year Returns - Where current valuations stand historically, and what they may mean in terms of forward returns.
Supporting Charts with Explanations - The technical charts that anchor the signals, with concise commentary on what they’re indicating.
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Personal Note: Super Bowl, Florida, and Park City
As I hit the send button, I see the market has rallied nicely today. I see no major news. Investors buying the dip?
The NFL Super Bowl is this Sunday at 6:30 PM ET. Susan and I will be watching at home. I saw a funny retweet from Bloomberg's Tom Keene. I have friends in both places, so I’m rooting for a close and exciting game. Keep an eye out for the ClaudeAI commercial. Great fun!
Source: X, @tomkeene, @TheBsblr
Good luck to your favorite team on Sunday.
The opening ceremony for the 2026 Winter Olympics begins today. Some hopeful news on US downhill legend, Lindsley Vonn. Last week, she suffered a complete ACL rupture in her left knee during a crash at a World Cup downhill race on Jan. 30, just days before the Olympics. She also has bone bruising and possible meniscal damage.
Despite how serious a torn ACL normally is, she has reported minimal swelling and pain and has been working intensively on recovery. She completed at least one official downhill training run at the Olympics today, which makes her eligible to race in the women’s downhill event.
Her coach has expressed confidence that she will start the downhill event. She is scheduled for three events:
Women’s downhill (Feb. 8)
Team combined (Feb. 10)
Super-G (Feb. 12)
Fight, grit, and an unwavering will to win.
Meetings in Florida mid-month are up next (yes, a round of golf on the 16th), followed by the WallachBeth Annual Winter Symposium at the end of the month. By far, my favorite conference each year. Checking in, totally happy, and hope you have fun plans ahead as well.
Warm regards,
Steve
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Stephen B. Blumenthal
Executive Chairman & CIO
CMG Capital Management Group, Inc.
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Stephen Blumenthal founded CMG Capital Management Group in 1992 and serves today as its Executive Chairman and CIO. Steve authors a free weekly e-letter entitled, “On My Radar.” Steve shares his views on macroeconomic research, valuations, portfolio construction, asset allocation and risk management. Author of Forbes Book: On My Radar, Navigating Stock Market Cycles.
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