Software Stocks Plummet as ServiceNow, IBM Results Spark AI Disruption Fears
ServiceNow posts worst day ever; sector down on concerns AI tools from Anthropic, OpenAI will displace cloud subscription model
L'essentiel
- Software stocks tumbled Thursday as ServiceNow sank 17% (its worst day ever) and IBM dropped 9%, fueling concerns that AI tools from Anthropic and OpenAI will disrupt the cloud subscription model.
- Workday fell 10% and is down over 45% this year, while the iShares Expanded Tech-Software ETF fell 5% and is down 18% annually.
- Big tech giants Alphabet, Amazon, Meta, and Microsoft report Wednesday, with Apple following Thursday.
Résumé généré par IA
Pourquoi c'est important
Software stocks have been under pressure as investors worry AI tools from companies like Anthropic and OpenAI will disrupt the traditional cloud subscription model that has driven enterprise software growth. The sector's decline contrasts with big tech companies that have benefited from their central position in the AI boom.
Software stocks plummeted on Thursday as disappointing results from ServiceNow and IBM added to fears that artificial intelligence tools and services will disrupt their businesses. Shares of ServiceNow sank 17% Thursday, on pace for its worst day ever. The company narrowly beat Wall Street's estimates Wednesday, but said that conflict in the Middle East created a "headwind" for quarterly subscription revenue. IBM beat on earnings and revenue but maintained guidance. The stock dropped 9%. Salesforce and Hubspot each fell about 9%. Adobe and Intuit were down roughly 7%, and Oracle fell about 5%. Workday slid 10% Thursday, and is down over 45% this year. The iShares Expanded Tech-Software ETF (IGV) , which generally tracks the sector, fell about 5% Thursday and is down about 18% this year. The sector has been beaten down on concerns that AI tools from companies like Anthropic and OpenAI will displace the longstanding cloud subscription model. Tech's biggest companies mostly report next week, with Alphabet , Amazon , Meta and Microsoft scheduled to release results on Wednesday, followed by Apple a day later. Those companies have held up much better than the pureplay software vendors, mostly due to their central position in the AI boom. Microsoft, the one with the most software exposure, has been hit the worst, down 14% this year.
À surveiller
Perspective IA — des possibilités, pas des certitudes
Big tech earnings next week will determine market direction
Très probable · En quelques jours
Continued pressure on pure-play software vendors
Probable · En quelques semaines
Questions ouvertes
- Will big tech earnings next week reassure investors?
- How significantly will AI tools actually displace cloud subscriptions?
- Can pure-play software vendors adapt their business models?
