'Pretty comfortable' with where large tech firms are trading currently: Gabelli Funds' John Belton

Core Viewpoint - The technology sector, particularly software, is experiencing significant sell-offs, with the S&P software index down 11% in four days and WisdomTree's cloud ETF down over 10% [1][2]. Group 1: Market Dynamics - There are concerns that AI could disrupt software companies, leading to decreased revenues and importance, while simultaneously, doubts about AI's effectiveness contribute to market sell-offs [2][3]. - The market is currently treating all software stocks indiscriminately, despite varying levels of disruption risk among different companies [10][11]. - The recent sell-off has been characterized by indiscriminate selling, affecting both high-risk and more insulated business models [10]. Group 2: Valuation and Investment Opportunities - Many software companies were likely overvalued 6 to 18 months ago, especially as their fundamentals began to decelerate [8]. - Large tech platforms benefiting from AI are currently trading at reasonable valuation multiples, suggesting potential investment opportunities [8][9]. - Companies like Google and Amazon reported strong earnings but faced negative market reactions, indicating potential undervaluation relative to their fundamentals [13][14]. Group 3: Future of Software Industry - The software industry is at a critical juncture, needing to adapt to new technologies like AI to survive and thrive [19]. - The emergence of tools like Claude AI could commoditize software development, posing existential risks to traditional software companies [18][19].