Against the backdrop of accelerating AI technology implementation, software stocks came under pressure again on Thursday, becoming one of the few significantly weak sectors in the U.S. stock market during the market's upward movement.
Market data shows that the software stock ETF iShares Expanded Tech-Software Sector ETF (IGV) opened lower and continued to decline on Thursday, with the drop expanding to over 4.7% by midday, poised to close lower for the second consecutive day and set a new closing low since November 2023. The cumulative decline of this ETF has approached 30% this year.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/85716e91-2fc8-4a6d-aaea-cf0f2d96d885.jpeg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/85716e91-2fc8-4a6d-aaea-cf0f2d96d885.jpeg"/>
Correspondingly, the decline in software-as-a-service (SaaS) related indices was even more pronounced, dropping over 5% in a single day, with a cumulative decline of nearly 10% this week and an annual decline approaching 40%.
Among individual stocks, large software companies and high-growth targets generally weakened, with ServiceNow and Palantir dropping over 8% at midday, Workday falling more than 6% during the session, Salesforce declining over 5%, Oracle dropping over 4%, and Microsoft nearing a 3% drop.
Structurally, companies with high valuations that rely on continuous subscription growth experienced larger declines, indicating that funds are prioritizing withdrawals from targets more sensitive to future growth.
<h2>Intensive Catalysts: Anthropic and Meta Heighten Market Anxiety</h2>
One of the direct triggers for this round of sell-off is the latest developments in the AI field, which further reinforce &#34;substitution expectations.&#34;
On Wednesday, OpenAI's competitor Anthropic launched Claude Managed Agents, attempting to let AI directly take over complex workflows. On the same day, Meta released a new generation of heavyweight AI models. These developments were interpreted by the market as AI transitioning from an auxiliary tool to an &#34;executor,&#34; posing direct competition to traditional software.
In this context, the uncertainty regarding the future customer demand structure and business models of software companies has significantly increased.
<h2>AI &#34;Substitution Logic&#34; Impacts Growth Narrative, Software Stock Valuations Reassessed</h2>
The recent decline in software stocks is generally attributed to a core logic: the rapid development of generative AI and AI agents is shaking the foundations of traditional software business models.
Media reports indicate that investors are concerned that AI services may weaken the demand base for traditional software vendors, thereby compressing their long-term growth potential and pricing power.
Particularly noteworthy is that AI agents capable of autonomously completing multi-step tasks are seen as a direct threat to the SaaS model. Such tools are expected to reduce enterprises' reliance on multiple software subscriptions, thereby reshaping the entire software industry's value chain.
Kevin Caron, Co-Chief Investment Officer at investment advisory firm Washington Crossing Advisors, bluntly stated:
<blockquote>
&#34;A new threat has emerged in the current environment that did not exist before, and people's expectations for future growth have been completely shattered. Before the advent of AI, no one really worried about software being replaced. Now, all companies' moats need to be reassessed.&#34;
</blockquote>
<h2>Fundamentals Remain Stable, but Sentiment Dominates Short-Term Pricing</h2>
Software stocks have seen a significant price correction, but the overall fundamentals have not deteriorated in tandem.
Data shows that market expectations for software industry earnings are still being revised upward: the expected profit growth rate for the industry in 2027 is 16.5%, up from the previous 15.7%; revenue expectations are also showing a similar trend.
Meanwhile, valuations have clearly retreated, with the current expected price-to-earnings ratio for the industry at about 20.6 times, significantly lower than the past 10-year average of 34 times.
Some institutions believe that this combination of &#34;stable fundamentals + valuation correction&#34; indicates that the market is trading more on sentiment and long-term uncertainty rather than short-term performance deterioration.
<h2>&#34;Valuation Kill&#34; Continues, Discrepancies Begin to Emerge</h2>
Although short-term funds continue to flow out of the software industry, the market's views on the sector are becoming increasingly divergent.
On one hand, the structural shock brought by AI has not been fully priced in, and the business models of the software industry may face fundamental reconstruction; on the other hand, strong cash flows and robust balance sheets of companies have led some funds to start focusing on &#34;oversold opportunities.&#34;
Institutional views suggest that software companies still possess characteristics of &#34;high profits, high cash flow, and low debt,&#34; and as long as fundamentals do not significantly deteriorate, continued sharp declines may provide entry points for medium- to long-term investors.
However, against the backdrop of a continuously strengthening AI narrative, the reshaping of the valuation system for the software sector is not yet over, and the market may continue to oscillate between &#34;growth certainty&#34; and &#34;technological disruption risk.&#34;
Risk Warning and Disclaimer
The market carries risks, and investments should be made cautiously. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investing based on this is at one's own risk

PLTW

PLOO

Against the backdrop of accelerated implementation of AI technology, software stocks have faced a sell-off, with the iShares Expanded Tech-Software Sector ETF (IGV) falling by 4.7%, reaching a new low since November 2023, with a cumulative decline of nearly 30% for the year. Major software companies such as ServiceNow and Palantir have generally weakened, with declines exceeding 8%. Concerns about AI replacing traditional software have intensified, leading to a reevaluation of software stock valuations and increasing uncertainty regarding future demand and business models

- Software stocks faced significant declines amid the rapid deployment of AI technologies, with the iShares Expanded Tech-Software Sector ETF dropping over 4.7%, heading for a second consecutive day of losses and nearing a 30% drop this year.  
- Major software firms like ServiceNow and Palantir saw declines exceeding 8%, driven by market concerns that generative AI could undermine traditional software demand and reshape business models.  
- Despite the price pullback, fundamentals remain stable, as projections for industry profit growth have increased, indicating that current market shifts may be driven more by sentiment than actual performance deterioration.

华尔街见闻资讯

Roundhill PLTR WeeklyPay ETF

Leverage Shares 2x Cpd Acclrtd PLTRMnETF

ServiceNow

Leverage Shares 2X Long PLTR Daily ETF

Defiance Leveraged Long +Income PLTR ETF

GraniteShares 2x Long PLTR Daily ETF

Defiance Daily Target 2X Short PLTR ETF

SPDR S&P Software

iShares Expanded Tech Software Sector ETF

Direxion Daily PLTR Bear 1X Shares

Palantir Tech

Direxion Daily PLTR Bull 2X Shares

With expectations of AI impact looming, software stocks have been sold off again, with industry ETFs dropping nearly 5% during the session, hitting a new low in over two years