Making sense of the situation in SaaS stocks.

This is Motley Full Money.

Welcome to Motley Full Money. I'm Tyler Crow, and today I'm joined by longtime Fool contributors,

Matt Frankel and John Quast. So a few of us are going to be at a Motley Fool member event,

and we'll be a little bit of traveling. So we're pre-recording this episode. But we're going to do a

special episode where we're going to answer a listener question that we realized we couldn't do in a single segment

and we wanted to do a whole show about it. And it's, of course, about SaaS companies or

software as a service. So we got a question a couple days ago from Scott Pounders, one of our listeners.

And he asks, I own quite a few SaaS companies in my

portfolio, SaaS meaning software as a service, that have been hit hard due to the AI revolution.

Some have seen obvious that they can survive with AI. Could we do an episode in which popular SaaS companies are most vulnerable to AI?

I'm looking at particular companies HubSpot and Constellation Software.

So before we get too deep, I want to set the stage here of SaaS companies,

why Scott is so anxious about this particular topic.

Because I don't want to assume everyone listening knows exactly what's going on with

SaaS companies and kind of the disruption that we're seeing with AI.

So, John, how about you kind of set the stage here for what Scott is asking for everyone else?

Yeah, absolutely. I want to speak to that, Tyler. First, I do want to speak to SaaS companies in general and kind of why investors

have really loved these stocks historically. I think there are two reasons why these have been

well loved. And they're just really good businesses.

And the first way that we see that is these companies offer a software product suite.

And so this means that usually these companies have high profit margins.

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