Investors reassess AI disruption fears after a $1 trillion selloff, spotting undervalued software firms with strong revenue growth.
Software stocks rebounded after a $1 trillion selloff driven by fears that AI agents would replace traditional applications. The panic followed Anthropic’s Claude plug-in update, which expanded automation across legal, finance, and marketing sectors.
Many high-quality software firms saw valuations drop 40% or more from peaks while maintaining revenue growth. Analysts now view proprietary data and established workflows as AI advantages, not vulnerabilities, creating discounted entry points.
The AI investment narrative has shifted multiple times, initially favoring semiconductors, power producers, and data center infrastructure. Recent trading suggests the market overreacted to software’s perceived obsolescence.