AI-induced software selloff halts after $800 billion wipeout
After a wild six-day drop that erased over $800 billion from major US software stocks, the market finally found its footing.
The panic started when investors worried that Anthropic's new AI tools for legal work might make some traditional software less essential, contributing to the S&P 500 software and services index shedding more than $800 billion over the six sessions.
Some companies see slight recovery
If you follow tech or invest in stocks, this is a big deal—AI is shaking up what's considered "safe" in software.
Some companies bounced back a bit: ServiceNow and Salesforce ticked up, while Microsoft slipped slightly. Thomson Reuters actually jumped 3% thanks to solid results and AI optimism.
Even in Europe, tech stocks were mixed, with firms such as London Stock Exchange Group, RELX and Wolters Kluwer rising, while chipmakers like NVIDIA and AMD took a hit.
Not all experts agree on the panic
Investors got spooked by the idea that AI could eat into traditional software profits, leading to a rush for the exits.
But not everyone's panicking—JPMorgan's Stephen Parker called it a "healthy rotation," and Morningstar's Dan Romanoff thinks folks are overreacting given how strong these companies still are.
Even NVIDIA's CEO Jensen Huang said the selloff doesn't make much sense to him.