George and Ian consider the Saint Valentine’s day tech massacre.

In face of the carnage, we take a step back and remember that writing software is only part of the story. You need to plan, develop, test, sell and maintain. AI is untested in customer support for AI and much else besides.

We have flashbacks to when Open Source became a thing and look to the SaaS transition and lessons learned and not learned.

There is value amongst these hard-hit tech software stocks, but survival and growth in the face of AI is more than about having embedded products. It’s also about the company structure and culture, and scarily for UK investors, its code base too.

We consider the realignment of earnings multiples. After over a decade of analysts and investors assuming SaaS revenues go on forever, it’s now increasingly obvious that many software companies can and will die, and it might be messy.

George and Ian take comfort from FY25 trading updates but look forward to a year in which reality may bite back.

Trading updates from Raspberry Pi, and news flow from Intel and Samsung, remind us that things rarely happen as smoothly or as predictably in real world tech as is hoped – particularly in semiconductors.

Computacenter’s update has confirmed George’s view on hardware sales and serves as another illustration that cash flow matters and should not be taken for granted.

Looking to the US the traditional SaaS stocks are underperforming, dragged down by the question of what AI does to them and, importantly, software pricing. No sign of the market asking these fundamental questions of the UK stocks just yet.

Ian and George wish ChatGPT a Happy Birthday before cantering through recent UK small tech updates.

ActiveOps – going well but could short term brokers and metric obsessed fund managers stop this little gem from reaching its full potential

Cerillion – a pause for breath year, still well positioned, cash generative with excellent margins

GBG – it is going to be hard work but the management look to be up to the challenge

Then, looking to Autodesk, George considers changing charging / accounting models when faced with AI and difficult wider economics – doesn’t the market see right through this?