Thanks to Salesforce, ServiceNow, the Contrarian SaaS Bet Is Paying Off
The Software-as-a-Service (Saas) apocalypse hasn’t arrived, despite the growth of AI.
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NVIDIA Corp. (NVDA) dominated the financial headlines on Thursday after its big quarterly beat and guidance raise after the bell on Wednesday. The stock rose nearly 9% in trading on Thursday and took the NASDAQ up with it. I don’t hold NVDA, so I was more interested in the quarterly beat and raise from Salesforce, Inc. (CRM) as I have a fairly large covered-call holding in this name. The stock was up over 20% in trading on Thursday.
Furthermore, Salesforce’s CEO had plenty to say. He called the AI narrative around how it relates and will lead to the demise of software-as-a-service sector “nonsense.” The company also has announced a partnership called Claudeforce with Anthropic. This effort will integrate Claude’s AI reasoning directly into Salesforce’s platforms. Salesforce saw its AI effort Agentforce grow its ARR 240% year-over-year to $1.5 billion in the just reported quarter.
Salesforce’s results, guidance and commentary help propel significant rallies in other notable SaaS enterprise software stocks like ServiceNow (NOW) and Workday (WDAY) in trading action Thursday. SaaS stocks have been of two huge contrarian bets I have made and profited by in 2026 within my portfolio. I took fairly heavy covered call positions in Salesforce, Adobe Inc. (ADBE), Sprout Social (SPT), Freshworks Inc. (FRSH) and other SaaS names early this year when the market was overly concerned about near term AI disruption.
My other major contrarian bet this year was in health insurance companies like UnitedHealth Group (UNH) and Molina Healthcare (MOH) when they dropped in the first quarter around worries connected to Medicare reimbursement rates in 2026. These concerns turned out to be more smoke than fire. Both of these contrarian bets have been beyond successful and most of these covered call holdings will expire in the money over the next two monthly expiration dates. Note: I am not chasing the rallies in any of these equities after their rallies. I will use the proceeds to hopefully find another contrarian opportunity.
My regular readers know I believe much of the AI ecosystem is built on a house of cards and depend on Anthropic and OpenAI being able to raise hundreds of billions of dollars with successful IPOs to meet their huge commitments to the hyperscalers. They will need to become quickly profitable even as they face accelerating competition from much cheaper Chinese models.
I am largely avoiding both the chipmakers like Micron (MU) and hyperscalers like Meta Platforms (META). That said, I am taking positions in numerous names that are part of the effort to build out more electrical generation capacity to meet the huge demand on the grid from this massive AI infrastructure buildout. I have recently profiled two of these names, ERock, Inc. (EROC) and SOLV Energy, Inc. (MWH), in recent columns.
I also have taken a recent position in energy storage provider Energy Vault Holdings, Inc. (NRGV) which is seeing surge in order backlog. All of these names are recent IPOs and down significant from the peak post IPO prices. Hopefully, this will be my third successful contrarian bet of 2026.
At the time of publication, Jensen was long ADBE, CRM, EROC, FRSH MOH, MWH, NRGV, SPT and UNH.
