Private equity giant Thoma Bravo is preparing to capitalise on the recent drop in software stock valuations, describing the sell-off as a “huge buying opportunity,” according to a report by the Financial Times citing co-founder Orlando Bravo.
The US-based firm, which manages over $180bn and recently closed a $24.3bn software-focused fund, sees specialised software companies as resilient to AI disruption, particularly those with deep domain expertise in areas like cybersecurity or payroll. At the World Economic Forum in Davos, Bravo argued that such firms’ “franchise” value cannot easily be replicated.
Despite sector-wide declines—Microsoft, Meta, Oracle, Salesforce, and Adobe have all fallen sharply in recent weeks—Thoma Bravo believes well-positioned software businesses remain attractive targets. The firm has previously executed large deals in the space, including a $12.3bn take-private of HR software company Dayforce.
Bravo acknowledged that non-specialised software companies remain vulnerable to AI disruption, and excessive stock compensation in some public software firms can make acquisitions challenging. Still, he remains confident in the long-term investment potential of the sector, noting that many legacy systems are unlikely to be replaced by AI solutions.
