Wall Street may no longer put up with all your SaaS.

Amid the barnstorming debut of Anthropic’s Claude Cowork platform — a layman’s version of its popular and powerful AI coding platform, Code — shares of software as a service (SaaS) firms continued to tumble last week. Not so coincidentally, the downturn comes just as Anthropic seeks a $10 billion fundraising round at a monstrous $350 billion valuation, according to a recent report in The Wall Street Journal. The ultimate disruptor industry may be on the verge of a Big One as “learn to code” gives way to “learn to have AI code for you” and takes the entire SaaS industry down in the process.

No Longer at Your Service

Where OpenAI has gone broad, seeking hundreds of millions of daily users, Anthropic has gone narrower, honing in on business clients. And within its scope, a niche has emerged: tech firms, which can’t get enough of the Code platform (The Wall Street Journal recently reported how software engineers, learning to love the coding agent, have gotten “Claude-pilled”; one said the platform has made him five times more productive). With Code, users can essentially create software that does anything — from analyzing specific datasets to building websites and editing photos. Cowork, meanwhile, launched in a “research preview” earlier this month, purports to make those tools accessible to the common dolts among us (present company included).

Unsurprisingly, that has made it a really tough time to be a SaaS company that provides the tools to do, well, any of these things. Anything SaaS can do, Claude can do better, more specific, more tailored. That’s the pitch anyway, and so far, Wall Street is eating it up:

• Shares of predominant SaaS firms Adobe, HubSpot and Salesforce fell 1.1%, 1.6% and 2%, respectively, last week. The iShares Expanded Tech-Software Sector ETF, which includes a couple of AI plays mixed in with pure SaaS players, is down about 8% year-to-date, while a basket of 15 SaaS firms tracked in a Morgan Stanley index opened the year down 15% through January 18, according to a Bloomberg report. (Morgan Stanley did not respond to a request from The Daily Upside for more recent data.)
• “Many buy-siders see no reasons to own software, no matter how cheap or beaten down the stocks get … They assume zero catalysts for a re-rate exist right now,” Mizuho Securities tech sector analyst Jordan Klein wrote in a note earlier this month, per Bloomberg.

Paying Off: For Anthropic, all that coding is paying off. The company said Code drew $1 billion in annual recurring revenue last year; it expects that figure to grow by another $100 million this year, sources recently told Wired. Meanwhile, Cowork is now available to any user on the $20-per-month Pro tier. On the flip side, the coding agents appear (unsurprisingly) quite energy-intensive. In a blog post, one software engineer recently found that a Claude Code session required vastly more energy than the median ChatGPT query (though slightly less than toasting bread for three minutes).

What’s more appealing: loads of cash or the ability to avoid the public spotlight and the scrutiny that comes with it? In 2026, more companies are choosing the former, and a crypto company is the first to the party.

BitGo made its public market debut last week, serving as both a kickoff for what Wall Street expects to be a monster year for IPOs and a market taste test for digital asset public listings following crypto’s recent nosedive. Bitcoin’s price hit an all-time high of around $126,000 in October, but was trading closer to $90,000 at the end of last week.

Priced above the expected range at $18, shares of crypto custody firm BitGo surged on its first day of trading before paring most of the gains, then sliding further on Friday to end the week at $14.50. Still, it warmed up the runway for other unicorns hoping to impress Wall Street.

Listing Lift-Off

“We are expecting the biggest year in the IPO market since 2021,” Matt Kennedy, senior IPO market strategist at Renaissance Capital, told The Daily Upside. Amid a gradual recovery likely to last for years, he expects the “largest pipeline of pre-IPO companies since the dot-com era.”

That doesn’t mean IPOs will reach 2021 levels, since companies nowadays are happy to sit on the sidelines and raise money privately. The median age of companies when they go public has risen from around 6.9 years a decade ago to 10.7 years today, according to a recent Morningstar analysis. And those private markets are very generous, as illustrated by the more than 1,400 global unicorns — privately held companies valued at more than $1 billion — that are collectively valued at $5.2 trillion.

Kennedy expects a broader array of sectors, including biotech and industrials, to hit the public markets this year. Crypto still has legs but faces more pressure than a year ago, when it was riding the high of President Donald Trump’s election and hopes for deregulation, he adds.

Some of the largest unicorns in the world are signaling that they’re ready for their public debuts:

• Artificial intelligence companies Anthropic and OpenAI have taken early steps toward an IPO, The New York Times recently reported.
• Elon Musk’s SpaceX is also reportedly prepping for an IPO, having met with bankers from Bank of America, Goldman Sachs, JPMorgan Chase and Morgan Stanley in recent weeks, according to the Financial Times.

Offering Opportunity: Valuations are nowhere near where they were during the rush of IPOs in the early 2020s, but that benefits investors, Kennedy says, since good companies can go public at reasonable prices. And retail investors, who have traditionally been excluded, are now gaining greater direct access to IPOs through online brokerages like Robinhood.

Investors are poring over Elon Musk’s prolific X posts (~94 a day, Sasa has found) for hints about what to expect from Tesla’s earnings, due Wednesday.

The billionaire CEO seems to be trying to temper expectations, posting that production is “agonizingly slow” for both the Optimus robot and the autonomous Cybercab. At the same time, Musk has been hyping the capabilities of full self-driving.

Progress on those plans will be pivotal on Wednesday. Even though analysts expect Tesla to notch revenue declines in the holiday quarter, as EV sales continue to slip, investors have shown that they’re willing to electrify the stock as long as they think Musk’s on the road to making his futuristic vision a reality.

Shifting Gears

No matter what Musk posts the most about on X, EV sales still make up the vast majority of Tesla’s revenue. And it’s no longer the No. 1 EV seller. Earlier this month, Tesla shared that it delivered about 1.6 million vehicles last year, a 9% drop from 2024. China’s BYD, meanwhile, sold 2.3 million.

Tesla faces industry-wide issues, including the expiration of Biden-era tax incentives and the bargain prices consumers can find on the used EV lot. But it also faces Tesla-specific problems, like owners buying “Elon Sucks” bumper stickers.

The EV-maker’s shifting its focus, and so are investors:

• Tesla engineer Lars Marovy called the next-gen Roadster, which could start production as soon as next year, “the last best driver’s car.” Four of the top five questions Tesla shareholders upvoted to be asked at the upcoming earnings call concern full self-driving and Optimus (the other question is about whether Tesla shareholders will be prioritized if and when SpaceX goes public).
• But progress on the new tech is start-and-stop. Tesla last week put a handful of driverless robotaxis on the road in Austin. The camera-only cars (rivals also use sensors) have raised eyebrows among critics who fear they could hinder its wider rollout. Meanwhile, Tesla said production of Cybercabs would start this year and Optimus bots “hopefully” next year.

Mag 7, Shmag 7: Tesla’s one of the first Magnificent 7 companies to report this earnings season, with Meta and Microsoft slated for the same day. However, as generative AI companies dominate headlines, it’s unclear whether their performance is still the most accurate way to gauge broader investor sentiment. The internet has suggested a new acronym: MANGO, which includes Microsoft, Anthropic, Nvidia, Google DeepMind and OpenAI.