Wall Street’s recent stance towards major software companies has raised eyebrows, as analysts like Dan Ives from Wedbush voice concerns about a broad sell-off in the sector. Ives noted that top firms such as Salesforce, ServiceNow, and Microsoft are being treated as if they lack relevance in a world increasingly dominated by artificial intelligence (AI). Speaking with Bloomberg, he described the current trends as a “structural sell-off” in software that he has never witnessed in his 25 years in the industry.
Ives emphasized that this decline is not merely an adjustment to market expectations but reflects a deeper belief among investors that software companies might not have a place in the evolving landscape of AI technology. He suggested that these companies might be expected to see real declines rather than merely adjustments to forecasts. Specifically, he estimated that some businesses could face a loss of around 5% of their customer base.
While acknowledging that AI is indeed reshaping the software industry, Ives argued that declaring software obsolete is an overreaction. He pointed to Palantir Technologies as an example of a company successfully navigating the AI landscape, demonstrating that software can still play a crucial role in modern technology.
In a related discussion, Nvidia CEO Jensen Huang addressed concerns about software being rendered irrelevant by AI. During the Cisco AI Summit, he labeled the notion as “illogical,” asserting that AI fundamentally depends on software rather than replacing it.
These insights come amid broader market trends where stability for technology stocks is uncertain. Investors are grappling with the implications of AI on various sectors, and the sentiment surrounding software companies seems particularly strong. As the situation develops, the tech industry watches closely to see how traditional software firms will adapt and evolve in this rapidly changing environment.
