don’t think software is completely replaceable—and not even in the near future. Some software companies will survive better than others. Some may even prosper. But AI is evolving so fast that no one can tell with certainty which is which—and so investors are doing what they always do when uncertain: dump everything first, ask questions later.
Regardless, some re-rating needs to happen. Even if these software businesses survive, can they continue to grow like they used to? Or will they mature and slow down, growing like a utility rather than a high-flyer?
Although software got the worst hit, the fear is spreading to other parts of the market—including AI stocks, the very ones that are supposed to be replacing software. Ironic, isn’t it?
In a general view growth stocks are getting whacked. The Magnificent 7 were not spared—as a whole, they are down 4.76% YTD. AI stocks, represented by the Global X Artificial Intelligence & Technology ETF (AIQ), are down 4.7% as well. The broader tech index QQQ is down 2.81%. And the software stocks? The iShares Expanded Tech-Software Sector ETF (IGV) tanked 24.62%.
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