Imagine a time when computers were solely used for basic calculations. Fast forward decades, and now they orchestrate symphonies of automation and intelligence across businesses. Today, AI agents represent the pinnacle of this evolution, autonomously handling tasks once thought impossible and redefining how software-as-a-service (SaaS) companies operate. In our view, SaaS represents the dominant business model for the various applications we think of as cloud computing companies.

Elon Musk has noted, "AI will be able to do everything." He envisions a future where AI's capabilities extend across domains, performing functions traditionally handled by knowledge workers and even reshaping the workforce entirely.¹ Microsoft CEO Satya Nadella encapsulates this vision, stating, "AI agents will become the primary way we interact with computers in the future. They will be able to understand our needs and preferences, and proactively help us with tasks and decision making."² This highlights the transformative potential of AI agents in reshaping software interactions.

These AI agents are no longer confined to futuristic visions; they are actively driving efficiency and reshaping user experiences within SaaS platforms, becoming indispensable tools in modern business.

What Are AI Agents?

To understand AI agents, think about how they've quietly grown out of technologies we've come to rely on daily. Imagine scrolling through Netflix. The recommendations you see aren't random; they're the result of machine learning analyzing what you've watched and guessing what you'll love next. Or consider the ads that pop up online—hyper-targeted to your recent searches and shopping habits. This evolution didn't happen overnight but has grown step by step, weaving intelligence into our digital lives.

Generative AI took this further. Tools like ChatGPT and DALL•E don't just analyze; they create. From drafting emails to designing prototypes, they've opened doors to creativity at scale. But even they are just stepping stones.

AI agents are the next leap. Unlike the single-purpose tools we're used to, these programs tackle interconnected tasks—managing customer service tickets, predicting sales trends or optimizing operations. They learn, adapt and make decisions independently, embodying a new level of software sophistication. They're not just tools; they're collaborators, reshaping what software can do for us.

How SaaS Companies Are Using AI Agents

In every corner of the SaaS world, AI agents are quietly revolutionizing the way companies operate—and the way we experience their products.

Take customer service. Not long ago, endless wait times defined support calls. Today, Zendesk's Answer Bot can handle routine inquiries instantly, 24/7.³ By the time a human agent joins, they're free to solve nuanced problems, creating better outcomes for customers and companies alike.

In sales and marketing, AI is the unseen strategist. HubSpot's tools analyze mountains of customer data, predicting who's ready to buy and crafting campaigns that speak directly to their needs. The results? More engagement, fewer wasted opportunities.

While those examples are certainly important, one of the biggest focal points over the past few years has been different AI solutions involving software coding. GitLab has recently enhanced its offering.

Imagine this: You're deep in the flow of coding. Ideas are spilling onto your keyboard faster than you can think, and you're building something new, something exciting. Then you hit a snag—a moment when a complex pattern or forgotten syntax halts your momentum. In that instant, GitLab's new AI solution can step in, like an experienced co-pilot who knows just when to take the controls.

GitLab's vision for AI in coding isn't just about convenience—it's about redefining how software is built. Its flagship solution, GitLab Duo Code Suggestions, does more than complete lines of code. It understands the rhythm of your work. With predictive code completion, it doesn't just offer snippets—it suggests whole functions, patterns and even the kind of nuanced structures that keep a coder in the zone. And it's not bound by one language; it speaks 14 fluently, from Python to Java, C++ to Ruby. Wherever you work—whether in GitLab Web IDE, VS Code or even NeoVIM—GitLab Duo fits in seamlessly.⁴

But there's more to the story. GitLab isn't walking this journey alone. It has partnered with Anthropic, a name synonymous with thoughtful AI. Anthropic's generative AI model, Claude, is woven into GitLab Duo's DNA, ensuring the code suggestions are not just smart but safe and ethical. This collaboration is about building trust—trust that the AI working alongside you has your back.⁵

Then there's GitLab's alliance with Amazon Q, which adds yet another layer of innovation. Imagine turning a vague feature idea into merge-ready code with just a few clicks. Picture AI-driven unit tests that not only save time but also elevate the reliability of your software. Or consider this: automated security reviews that catch vulnerabilities before they become problems. Amazon Q's integration is like giving your entire development workflow a turbo boost.⁶

In the story of modern software development, GitLab is making a bold bet: that by weaving AI into the fabric of coding, we can build faster, safer and with more creativity than ever before. It's a story still being written, but one thing is clear: the future of coding isn't just human or machine—it's a partnership between the two.

Another example, recently highlighted within a featured discussion in Barron's, is Atlassian.⁷ Atlassian stands as a cornerstone in the world of team-collaboration software for developers, quietly weaving itself into the fabric of modern software development. Its reach is staggering: More than 15 million developers, representing more than 50% of all global developers, rely on its tools daily. More than 300,000 companies, from startups to industry titans, have integrated Atlassian into their workflows.

The numbers tell a compelling story. Over the past three years, Atlassian's revenue has grown at an annualized rate of 28%—a pace that few companies of its scale can match. The market now asks: Can this growth persist above 20% in a world where generative AI is poised to reshape the demand for software developers? While some see AI as a disruptor, threatening the need for human developers, the real story may be the opposite. AI, when combined with Atlassian's suite of tools, has the potential to supercharge productivity, solidify the company's position and extend the durability of its growth story.

A prime example of Atlassian's foresight is Rovo, an AI agent introduced in October 2024. Rovo doesn't just automate—it transforms. Tasks that previously consumed a day and a half each week are now completed in mere minutes, creating a ripple effect across software development teams. Beyond saving time, Rovo aligns with Atlassian's broader shift to cloud adoption, a move that not only deepens customer reliance but also unlocks long-term revenue growth. For a company already at the center of developer workflows through products like Jira and Confluence, Rovo represents an exponential leap forward.

Here's where the numbers get interesting. Without Rovo, Atlassian is expected to generate $8 to $9 in free cash flow per share by 2026. Add Rovo to the equation, and that figure could increase by $1 to $2 per share. At 35 times free cash flow—a reasonable valuation, given ServiceNow trades at a premium—the stock could double in value. And that's with what could be considered conservative assumptions.

Atlassian's story isn't just about tools or technology. It's about leveraging the inevitable march of innovation to position itself as indispensable to the builders of tomorrow. If Atlassian can continue to marry foresight with execution, it won't just grow—it will thrive in ways that could redefine what's possible for the entire software ecosystem.

The Impact of AI on the Future of Work in SaaS

In the 1980s, an office was defined by the hum of typewriters, the shuffle of paper files and the steady rhythm of manual data processing. These tasks, monotonous yet essential, seemed irreplaceable. Fast forward to today, and those very jobs have been transformed—not eradicated—by the advent of computers and software. Instead of filing cabinets, we have cloud storage; instead of typewriters, digital platforms. Each wave of technological change didn't eliminate work; it shifted its nature, proving the Lump of Labor fallacy⁸—the belief that there is only a fixed amount of work to be done—wrong time and time again.

AI isn't here to replace us—it's here to augment us. The future of work in SaaS is not a zero-sum game; it's a dynamic partnership. Humans will be freed from mundane tasks to engage in roles that require empathy, creativity and strategic thinking. This shift is already fostering new careers in AI development, data science and experience design. The workforce isn't shrinking; it's evolving—proving once again that technology doesn't reduce our purpose but refines it for the better.

Conclusion: AI Agents as Growth Catalysts for SaaS

The journey of AI agents in SaaS is more than just a story of automation; it's a narrative of unlocking untapped potential. For SaaS companies grappling with the challenge of balancing growth and profitability, AI agents provide a bridge. Imagine a company struggling to scale—AI doesn't just streamline operations; it identifies new markets, crafts personalized customer experiences and amplifies the effectiveness of every sales interaction. This isn't hypothetical; it's the new reality for forward-thinking SaaS leaders.

Recent findings by McKinsey highlight a critical lesson: SaaS companies that overcorrect toward profitability risk leaving substantial value on the table.⁹ AI agents could represent an antidote to this trend. By automating repetitive tasks and augmenting human decision-making, AI not only reduces operational costs but also fuels innovation and growth. From smarter marketing campaigns to seamless product development cycles, the possibilities are vast.

Looking ahead, AI agents could be the key to unlocking better returns in software stocks. As these tools continue to evolve, they are set to redefine not just the SaaS industry but the expectations of software's role in driving business value. The companies that embrace this technology strategically, balancing efficiency with investment in growth, will lead the next wave of SaaS transformation—creating enduring value for their shareholders and customers alike.

Investing in the AI-Powered Future of SaaS

As AI agents continue to redefine software development, productivity and efficiency, the companies leading this transformation stand to benefit the most. For investors looking to capture the potential of AI-driven SaaS growth, the WisdomTree Artificial Intelligence Fund (WTAI) provides targeted exposure to innovative businesses at the forefront of this revolution.

Learn more about how WTAI can help you invest in the future of AI-powered SaaS. Explore the Fund today.

¹ Schappert, Stefanie. "Musk Predicts ‘More Robots than People' by 2040 in Latest Interview. Here's What Else He Said from AI to Zed." CyberNews, 29 Oct. 2024.

² "AI Agents Will Revolutionise SaaS and Productivity: Microsoft CEO Satya Nadella." Economic Times, 7 Jan. 2025.

³ Customer Service Answer Bot. Zendesk, https://www.zendesk.com/service/answer-bot/customer-service/.

⁴ GitLab Duo Documentation. GitLab, https://docs.gitlab.com/ee/user/gitlab_duo/.

⁵ Chu, Kevin. "GitLab Uses Anthropic for Smart, Safe AI-Assisted Code Generation." GitLab Blog, 16 Jan. 2024.

⁶ Guimaraes, Matheus. "Introducing GitLab Duo with Amazon Q." AWS News Blog, 3 Dec. 2024.

⁷ Rublin, Lauren R. "Nvidia, Smucker, Muni Bonds, and 31 Other Investment Ideas From Our Roundtable Pros." Barron's, 17 Jan. 2025. Comments on Atlassian from Henry Ellenbogen's portion of the Barron's roundtable discussion.

⁸ Nowak, et al. The Morgan Stanley AI Guidebook: Third Edition. Morgan Stanley Research, 18 Oct. 2023.

⁹ How Efficient Growth Can Fuel Enduring Value Creation in Software. McKinsey & Company, https://www.mckinsey.com/~/media/mckinsey/industries/technology%20media%20and%20telecommunications/high%20
tech/our%20insights/how%20efficient%20growth%20can%20fuel%20enduring%20value%20creation%20in%20software/how-efficient-growth-can-fuel-enduring-value-creation-in-software.pdf?shouldIndex=false.