The SaaS-pocalypse, a brutal sell-off hitting software names (especially those that sell software based on seats) over the fear that AI could erode the moats of the top names in the Software-as-a-Service scene, has mostly calmed down after a brutal, panic-driven stumble in the first half of 2026.
Undoubtedly, we’ve seen a lot of bruised software plays rebound since the SaaS-pocalypse concluded, but at the same time, not every software name has been on the road to recovery.
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Thomson Reuters is under pressure, but investor anxiety looks to be settling
While shares of Thomson Reuters (TSX: TRI), known for its media and legal software businesses, have been looking up in recent months, with the stock now up 24% in the past three months, the name is nowhere close to regaining the ground it had lost since its shares went into free-fall last summer.
Indeed, Thomson Reuters was already in a world of pain, even before the year’s SaaS-pocalypse took hold. Now that the stock is on the mend and the valuation is in a more reasonable spot (25.3 times trailing price to earnings), the big question is whether AI is more of a tailwind than a headwind. Indeed, when you just look at the stock chart, it’s apparent that AI poses more risk than reward.
Still, I’m not a buyer of the SaaS-pocalypse and still think there’s serious value to be had in the battered names that still haven’t made all that much of a recovery since the cohort mostly bottomed out in the year’s first half.
In a number of prior pieces, I highlighted that Thomson Reuters was actually using AI in intriguing ways that I thought could give it some meaningful momentum. Of course, just about every enterprise software firm is already tacking on a large language model (LLM) on the side.
AI could become a serious driver
What sets Thomson Reuters apart, though, is its own custom model, which, I think, could be a meaningful catalyst that the market hasn’t quite woken up to. Indeed, custom AI models aren’t as exciting as they used to be.
But in the case of Thomson LLM, I think that the wait will be worth the while, especially as firms get serious about the cost-to-benefit breakdown of any given model. Add the CoCounsel legal platform into the equation, and I must say that Thomson Reuters has a pretty good defence (no pun intended) as the AI wave moves through the industry.
While I do understand the AI fears, I must say that the company’s own AI prowess might just help shares recover. As the list of partners builds and the firm looks to demonstrate the power of fiduciary-grade AI, my guess is that investors will, in due time, start feeling more comfortable about getting into the stock again despite the stunning headlines from the most innovative AI labs at the frontier.
The bottom line
Given Thomson Reuters’s domain knowledge and data moat, my guess is that AI could go from perceived headwind to tailwind, perhaps faster than investors think. Until the quarterly results take an AI-driven hit to the chin as many are expecting, I’m a bull on shares of TRI at these depths.
