Constellation software is now down 52%, the highest ever drawdown in its 20-year history.

The company is now trading as if AI will disrupt its entire business. At the current valuation, the company is better than almost every other company in terms of the “Rule of 40” [Chart source: Jefferies]

It will take a few quarters for the market to realize that AI is not taking away business from Constellation

Think about it: There is next to no chance that a telecom or mining business that has worked with a vendor for 10+ years and fine-tuned the software to cater to their business perfectly is suddenly going to vibe-code an alternative just to save 0.1% of their revenue in software costs.