Tax Cuts and The Enterprise Stocks

I’ve been in New York all week with my partners Tom and Gary running from meeting to meeting.

I had a great time catching up with Ian – Stocktwits CEO. The numbers look great. I love hanging with the community and content team – Stefan, Mike and Scott (all millennials) – who love the markets and have such a unique take on content.

After the market chaos of last week it was good to just be glancing at the markets and letting the rally off the panic play itself out.

A few trends seem to be playing out post pax cuts.

I won’t argue about who is getting the money, but companies are doing ridiculous large buybacks. The people that own these stocks will benefit.

Money is pouring into enterprise stocks. Salesforce ($crm), Hubspot ($hubs), Okta ($okta), Zendesk ($zen), Workday ($wday), Mulesoft ($mule) are all at -all time highs.

If you follow me on Stocktwits you know I added $okta and $mule during the week and they both exploded to all-time highs). Ivan and I discussed $okta in depth before the breakout in our Momentum Monday Video on this blog Monday.

All these leaders provide tools (sales, support, marketing automation….) to corporate America.

It makes sense that hedge funds are speculating that the tax breaks not used by companies to juice their own stocks will be uses to upgrade software.

If the market holds this year, I expect this trend to lead to an explosion of acquisitions in the enterprise space with these companies getting bought themselves and/or these companies doing a lot of buying of smaller and private competitors.

Disclosure – Long $zen, $okta $mule


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