Thoma Bravo CEO Orlando Bravo said Wednesday at Semafor World Economy he’s still bullish on software-as-a-service companies if they show leadership in a niche and the ability to leverage AI, despite lower valuations.

“There are the most incredible buying opportunities right now in the market,” said Bravo, who is founder and managing partner of Thoma Bravo, a private-equity firm with assets under management of $183 billion.

“You just need to know what you’re looking at and what you’re buying.”

Valuations of SaaS companies have taken a big hit this year in the stock market due to jitters about competition from AI, which has proven to be a robust tool for coding software and other tasks.

The selloff has made prices more desirable for companies that fit Thoma Bravo’s investing guidelines, he said.

The first thing Thoma Bravo wants in a target company is the highest quality business in a particular space, usually the number one player, he said. The company must have a management team with deep domain experience, along with “big momentum” using AI to accelerate growth, he said.

“If we can get those three things at these bargain prices, we are huge, huge buyers of these companies right now,” he said.

Software-as-a-service companies that aren’t generating income now may not survive, but already-profitable niche software players with a defensible moat will likely thrive, he said.

One example of the latter company type is Thoma Bravo’s 2025 acquisition of portfolio company Jeppesen ForeFlight from Boeing Co., a provider of aviation software for tracking planes and improving safety.

“They know what the traffic controllers need — they’re providing new AI solutions to the airlines,” Bravo said. “They’re doing context graphs — so [that’s] way beyond what a generalist infrastructure provider can do. That’s a deep domain.”