SaaS Stocks Had Their Worst Start to a Year in History
Things have been crazy!
The first five weeks of 2026 have been catastrophic for SaaS stocks. By every meaningful measure, this is the worst start to a year the sector has ever experienced.
Through February 5th, the average top-15 enterprise SaaS stock is down 28.2% from its December 31st close. That’s worse than the 2016 China crash (-26.9%), worse than the 2022 rate hike panic (-16.7%), and worse than any other year on record.
It’s a bloodbath.
The Numbers Don’t Lie
I analyzed the top 15 SaaS companies by market cap for every year since 2010, measuring performance from December 31st through early February. Here’s what the data shows:
2026 now stands alone as the worst start to a year for enterprise SaaS stocks in history.
The Carnage, Stock by Stock
Nearly every major SaaS name is experiencing its worst start to a year ever:
10 of the 14 enterprise SaaS stocks in our basket are at all-time worst starts. The only companies escaping their personal record lows are ServiceNow, Shopify, Workday, and Veeva - and even they’re down 17-33%.
What’s Driving the Selloff?
Three forces are converging:
1. AI Disruption Fears
The market is repricing SaaS multiples as investors question whether AI agents will commoditize enterprise software. If an AI can replace a $150/seat/month tool, what’s the moat?
2. Multiple Compression
After years of “growth at any cost,” investors are demanding profitability. SaaS companies trading at 15-20x revenue are being repriced to 8-12x.
3. Tech Rotation
Capital is flowing out of application software and into AI infrastructure plays - Nvidia, hyperscalers, and AI-native companies.
Methodology Note
This analysis uses an equal-weighted basket of the top 15 SaaS companies by market cap as of December 31, 2025. The basket is reconstituted annually to reflect the actual investable universe each year.
I excluded Zoom from the 2026 basket because its recent stock performance is driven primarily by its equity stake in Anthropic, not its core SaaS business. Including Zoom would mask the true severity of the enterprise SaaS selloff.
The full basket for 2026 includes: Salesforce (CRM), Shopify (SHOP), Intuit (INTU), ServiceNow (NOW), Adobe (ADBE), CrowdStrike (CRWD), Snowflake (SNOW), Workday (WDAY), Datadog (DDOG), Atlassian (TEAM), Veeva (VEEV), Zscaler (ZS), Twilio (TWLO), and HubSpot (HUBS).
What Comes Next?
History offers some comfort. After the 2016 crash (-26.9% through early February), SaaS stocks recovered and ended the year roughly flat. After the 2022 selloff, the sector rallied 20%+ by year-end.
Only time will tell what happens at the end of 2026.
Data sources: Financial Modeling Prep API for historical prices and market caps. Analysis methodology and code available on request.
What i Like- Good data pull, the historical comparison is genuinely useful context. Few people are actually putting numbers behind the "SaaS is getting crushed" narrative, so credit for that.
Where I think this could go deeper- the 2016 and 2022 recoveries happened in fundamentally different macro regimes. Rate panics are cyclical, AI displacement might be structural. The real question this data raises but doesn't answer is: which of these companies are being repriced because of market-wide panic (and will bounce back), vs. which are being repriced because AI agents are genuinely commoditizing their product?
ServiceNow and CrowdStrike probably have very different moat stories than Twilio or HubSpot right now. A V2 that segments the basket into "structurally threatened" vs. "caught in the crossfire" would be genuinely differentiated - I haven't seen anyone do that analysis well yet.
Also worth flagging: the reconstituted basket makes year-over-year comparisons tricky since you're comparing different companies each time. Might be worth running a fixed cohort alongside it as a sanity check.
Would read the follow-up.
Very well researched and brought out !