Software Sector Selloff (-13% One Week) Spurs Cautionous Value Bidding: XYSOFT, SVC, ORCL, INTUIT

The "Software-mageddon" continues as investors debate timing to add value to beaten-down tech names amid heightened AI disruption concerns and disappointing earnings. The S&P 500 Software & Services Index fell 13% in one week through February 5, 2026, losing over $800B in market cap, while the broader index declined little. The index is down about 25% from its October 2025 peak, with Intuit, ServiceNow, Salesforce, Microsoft, and Thomson Reuters leading declines. The selloff follows Alphabet’s new Claude LLM and disappointing Microsoft results, and reflects a rotation away from tech to value and quality in consumer staples, energy, and industrials. While some managers are buying at the margin in ServiceNow, Monday.com, and Microsoft, most remain cautious awaiting AI revenue catalysts and stronger valuations. Technical indicators suggest the software group is near a near-term bottom, but opinions分歧 on whether current levels reflect value or risk of further selling.