So there's this interesting tension playing out in the market right now that's worth paying attention to. On one side, investors are getting nervous about how much money big tech companies are throwing at AI infrastructure. Amazon just announced plans to spend $200 billion on AI capex in 2026, and the market punished them for it - stock's down about 9% year to date. Microsoft is in a similar boat despite solid earnings, with the market worried about their $100 billion capex spending plans this year.

But here's where it gets weird. At the same time, there's this other narrative spreading around that's basically the opposite concern. Software companies like Salesforce and Adobe are getting absolutely hammered because people are convinced that AI agents will eventually make traditional enterprise software obsolete. People are calling it the 'SaaSpocalypse' - like the software industry is about to get wiped out.

Think about that for a second though. Can both of these things actually be true? Are we really in a world where AI is so powerful it destroys an entire industry, but also so expensive that mega-cap tech companies are spending hundreds of billions on it and still disappointing investors? The logic doesn't quite add up.

Jensen Huang from Nvidia actually called out this 'SaaSpocalypse' thinking as illogical, and honestly I see his point. SaaS companies have built specialized solutions for specific industries and use cases. General-purpose AI tools probably aren't going to replace that overnight. More likely scenario is that AI and software companies end up working together, with AI making existing software better rather than replacing it entirely.

If you're buying into the idea that the software sell-off has gone too far, there's a straightforward way to position for a potential rebound. The iShares Extended Tech-Software ETF gives you exposure to 114 North American software companies. It's basically a concentrated SaaS ETF that lets you bet on the sector without picking individual stocks.

The fund holds some heavy hitters - Microsoft at 9.7%, Palantir at 8.2%, Salesforce at 7.7%, Oracle at 7.2%, and Intuit at 5.2%. It's been averaging 10.4% annual returns since 2001, and the expense ratio is reasonable at 0.39%. Right now it's trading at a P/E of 35.2, which is a bit higher than the Nasdaq-100 at 32.4, but that's not unreasonable for a focused SaaS ETF play.

The way I see it, if you think the market is being too pessimistic about software companies' ability to adapt and thrive alongside AI, this SaaS ETF could be an interesting way to express that view. You're essentially betting that the 'SaaSpocalypse' narrative is overblown and that software remains one of the world's most profitable industries. Whether that plays out probably depends a lot on how AI actually develops over the next couple years.