Software Sector Under Fire: Microsoft, Salesforce, ServiceNow Face AI-Driven Sell-Off (2026)

Software stocks are enduring the most severe sell-off in 25 years, with Wedbush analyst Dan Ives warning that firms such as Salesforce, ServiceNow and Microsoft are facing harsh valuation repricing perceived as ill-prepared for the AI era. “I can tell you this is the most structural selloff in the software sector in 25 years,” Ives said in a recent interview. “Investors appear to believe software is no longer central to the AI era.” He cautioned that some companies risk losing about 5% of their customers due to current valuations. While acknowledging AI is reshaping the industry, Ives said the fear of obsolescence is exaggerated, citing Palantir’s success as evidence. At the Cisco AI Summit, NVIDIA CEO黄仁勋 (Huang Renxun) disputed the notion, stating AI depends on software, not replaces it.