Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 650

The Ozempic moment for SaaS

The Ozempic moment for SaaS (software as a service) refers to a pivotal disruption scenario where a transformative technology threatens to erode or fundamentally reshape an established market leader’s core business model, much like the hype around Ozempic (and other GLP-1 drugs like Wegovy) did to ResMed (ASX:RMD) around 2023.

Back in mid-2023, as Ozempic exploded in popularity for dramatic weight loss, investors panicked over its potential impact on ResMed, the dominant provider of CPAP machines and sleep apnea devices. Obesity is a major risk factor for obstructive sleep apnea (OSA), affecting a large portion of patients. The fear was straightforward: if millions lost substantial weight via these drugs, demand for ResMed’s hardware; masks, flow generators, and related consumables could collapse, shrinking the addressable market and pressuring recurring revenue from resupplies and adherence.

The market reaction was brutal. ResMed’s shares plunged roughly 30-40% in the second half of 2023 (from highs around $33-34 AUD to lows near $21), with some periods seeing over 25% drops tied directly to GLP-1 headlines. Analysts and headlines screamed “Ozempic overshoot” or “end of ResMed,” drawing parallels to how weight-loss drugs might cannibalize device sales. Valuations compressed sharply, with forward P/E dropping from historical averages near 30x to lows around 18-21x amid “nonsense sell-off” commentary. Investors priced in a structural decline, fearing GLP-1s would reduce OSA prevalence or adherence rates.


Source: Morningstar

Yet the reality diverged. By late 2023 and into 2024, ResMed’s data showed GLP-1s as a tailwind, not a headwind. Patients on these drugs entered the healthcare system more motivated, showed higher propensity to start CPAP therapy (up to 10.5% in some analyses), and maintained stable adherence/resupply. Many used combined therapies, and not all OSA stems from obesity (about 50% of cases aren’t weight-related). CEO Mick Farrell repeatedly downplayed the threat, calling fears overblown. By 2024, shares recovered strongly, with the company beating forecasts and declaring the “headwind thesis completely gone.” The initial panic proved exaggerated; the disruption was real but incremental and slower than feared, with adaptation (e.g., hybrid treatments) preserving demand.

Fast-forward to January 2026, and SaaS faces its own Ozempic moment – this time from agentic AI and generative tools. Investor sentiment toward software/SaaS companies is overwhelmingly bearish, mirroring 2023’s ResMed rout. Stocks like ServiceNow, SAP, Salesforce, Adobe, and others have seen double-digit plunges post-earnings (e.g., ServiceNow down ~10% despite beats, SAP cratering 16% on guidance shortfalls). The Philadelphia SE Software sector is down sharply, with phrases like “SaaS meltdown” and “software apocalypse” dominating commentary.

The core fear: AI agents could replace human workflows, eroding seat-based/per-user pricing models that underpin SaaS giants. One AI agent might handle tasks previously requiring multiple licensed users, enabling in-house builds or cheaper alternatives. Horizontal/point SaaS without deep proprietary data or complex integrations looks especially vulnerable to commoditization. Investors demand immediate, exponential AI-driven growth to justify elevated valuations, yet guidance often shows steady (but not explosive) 18-20% subscription increases, triggering sell-offs.


Source: Goldman Sachs via Jeff Richards [@jrichlive], on X platform.

Like ResMed’s case, though, the threat may be overstated in the short term. Agentic AI adoption remains slower than hyped due to enterprise caution around trust, governance, security, and integrations. Many incumbents (e.g., Salesforce’s Agentforce, ServiceNow) are embedding AI deeply, shifting toward outcome-based or hybrid pricing. Vertical/deep-domain SaaS with proprietary workflows could endure or thrive as AI augments rather than replaces. Insiders predict evolution, SaaS reinvented as intelligent orchestration hubs, rather than outright death.

The parallel is striking: hype drives sharp deratings, but real-world data often reveals adaptation, tailwinds, and slower disruption. For SaaS today, as with ResMed then, the market may be over-discounting extinction while underpricing resilience and reinvention. The next 12-24 months of agentic progress and adoption will tell if this is another temporary panic—or a more profound shift.

TAMIM Takeaway

Every investing cycle has its Ozempic moment, a narrative shock so compelling that the market briefly forgets how slow real-world change actually is.

ResMed lived it in 2023. The story was clean, frightening, and wrong in its timing. GLP-1 drugs did not kill sleep apnea. They nudged behaviour, pulled more patients into the system, and ultimately reinforced demand for therapy. The sell-off was real. The extinction thesis was not.

SaaS is now in the same psychological phase.

Agentic AI is genuinely transformative. But transformation does not arrive overnight, and it rarely destroys incumbents before they adapt. Enterprises move slowly, governance matters, integrations are messy, and mission-critical workflows are not casually handed to autonomous agents. The seat-based model will evolve, pricing will change, and margins will be pressured at the edges. That is not the same thing as obsolescence.

History suggests the winners will be platforms with deep customer embedment, proprietary data, and the ability to orchestrate AI rather than compete with it. Just as importantly, history suggests markets overshoot on fear before they recalibrate on facts.

For patient investors, these moments are not warnings to flee. They are invitations to think clearly while others extrapolate headlines. The SaaS extinction trade may yet prove as exaggerated as the ResMed panic, and the opportunity may lie in separating real disruption from narrative excess.

 

Ron Shamgar is Head of Australian Equities at Tamim Funds Management and Portfolio Manager of the TAMIM All Cap Fund. This article contains general information only and should not be considered financial or investment advice. It has been prepared without taking into account your personal objectives, financial situations or needs. You should seek personal financial advice before making any financial or investment decisions.

 

  •   18 February 2026
  •      
  •   

 

Leave a Comment:

RELATED ARTICLES

There’s more to software than just code

Google is facing 'the innovator's dilemma'

There will be no permanent underclass

banner

Most viewed in recent weeks

Indexation implications – key changes to 2026/27 super thresholds

Stay on top of the latest changes to superannuation rates and thresholds for 2026, including increases to transfer balance cap, concessional contributions cap, and non-concessional contributions cap.

The refinery problem: A different kind of energy crisis in 2026

The Strait of Hormuz closure due to US-Iran conflict severely disrupted global energy supply chains. While various emergency measures mitigated the crude impact, the refined product market faces unprecedented stress.

Has Australia wasted the last 30 years?

The 20 years after Peter Costello left Treasury have been deemed wasted...by Peter Costello. The missed opportunities for Australia began long before.  

3 ways to defuse intergenerational anger

With the upcoming budget increasingly likely to include bold proposals to alter the tax code I’ve outlined three incremental steps with fewer unintended consequences.

Navigating the next stage of life in retirement

Retirement planning is more than just saving enough money. Long-term care needs, housing choices, and social networks are just as critical for a happy and enjoyable life.

The missing 30%: how LIC returns are understated, and why it matters

The perceived underperformance of LICs compared to ETFs is due to existing comparison data excluding crucial information, highlighting the need for proper assessment and transparent reporting.

Latest Updates

Superannuation

Do super funds need a massive wake up call?

UK retirement expert, Guy Opperman, believes super funds are failing at supporting members in deaccumulation. Here is what Australia should do about it. 

Retirement

Sequencing risk resurfaces for retirees

A retirement strategy must consider how both the timing of cash flows and the sequence of returns impact the final dollar outcome from which a retirement is funded.

SMSF strategies

Meg on SMSFs: Payday super – why should SMSF members even care?

Not filing your SMSF annual return on time can mean missed contributions under the new Payday super regulation. 

Strategy

There will be no permanent underclass

Worries about AI causing mass job loss are misguided. Far from creating a permanent underclass, Like other technological innovations AI will improve living standards around the world.

Taxation

Reforming the taxation of wealth and wealth transfers

As the budget approaches debate continues about the need and method for addressing wealth inequality. Could reinstating wealth transfer taxes be the answer?

Investment strategies

The biggest oil shock in history. Why isn't the price higher?

While increases in oil prices are dominating media coverage of the turmoil in the Middle-East it is worth exploring why prices haven't gone up more. 

Financial planning

Structured giving's new moment

A big year for philanthropy has seen multiple tax changes impact the approach donors are taking. For those with the intention to give generously there is a third structure available in the structured giving landscape.

Sponsors

Alliances

© 2026 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.