Life360 Inc (ASX: 360) shares are tumbling today.
Shares in the S&P/ASX 200 Index (ASX: XJO) location sharing software developer closed yesterday trading for $22.29. During the Wednesday lunch hour, shares are changing hands for $21.72 apiece, down 2.6%.
For some context, the ASX 200 is down 1% at this same time.
While Life360 shares remain up 12.2% since this time last year, the stock has come under heavy selling pressure since hitting an all-time closing high of $55.44 on 3 October.
As you may be aware, part of that selling has been driven by broader investor jitters that artificial intelligence, or AI, could replace a lot of the services that companies like Life360 currently offer.
You may have heard this referred to as the SaaSpocalypse.
But rather than run for the hills, Bell Potter Securities' Christopher Watt said the past months' sell-down now sees the ASX 200 tech stock offering "an attractive risk-reward profile" (courtesy of The Bull).
Here's why.
Image source: Getty Images
Should you buy Life360 shares today?
"This information technology company provides a mobile networking safety app for families," Watt said.
Commenting on the first reason he's bullish on Life360 shares, he noted, "The company offers a compelling growth story driven by its unique position at the intersection of safety, connectivity and subscription-based monetisation."
As for the second reason he has a buy recommendation on the ASX 200 tech stock, Watt said:
With accelerating premium subscriber growth alongside improving unit economics, the company continues to benefit from strong engagement and pricing power.
The integration of hardware and software ecosystems provide options for further monetisation, while operating leverage is beginning to emerge.
Then there's the SaaSpocalypse-fuelled sell-off.
According to Watt:
Given strong top line momentum, expanding margins and the recent sell-off in line with the broader technology sector, Life360 presents an attractive risk-reward profile, particularly at current levels.
Is AI a threat to this ASX 200 tech share?
It's impossible to gauge just how far and how fast artificial intelligence systems will advance over the next few years, and as such, their potential impact on service-oriented tech stocks.
However, Life360 CEO Lauren Antonoff believes that AI should help, rather than hinder, Life360 shares going forward.
Speaking after the company's full 2025 calendar year results release on 3 March, Antonoff said:
We are deep into the transition to become an AI-first company. Organisation-wide active AI adoption has grown to over 95%, accelerating our execution and expanding what's possible for families on our platform.
We see AI as an opportunity to accelerate our path and deepen our moat.
