US EditionSoftware Shares Are in the Doldrums. Blame AI | News Channel 3-12
Artificial intelligence threatens traditional software-as-a-service models, causing share declines in major firms while some tech giants invest heavily in AI capabilities, analysts say.
- Shares in major software companies like Salesforce, Adobe, and Atlassian have dropped sharply this year amid widespread market downturns.
- This decline follows growing investor concerns that AI-driven tools could disrupt traditional software models, especially SaaS businesses reliant on subscription revenue.
- Despite gains of 10% in the S&P 500 and 11% in the Nasdaq, the software and services sector experienced outflows for two straight months ending in June.
- The Morgan Stanley software basket trades at 23 times projected earnings, its lowest valuation since 2014, while analysts highlight rapid tech obsolescence and AI’s impact.
- Though AI risks threaten some firms, experts say established companies adopting AI can prosper, and the market may rebound as software adapts to the changing environment.
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Coverage Details
Total News Sources16
Leaning Left2Leaning Right2Center7Last UpdatedBias Distribution64% Center
Bias Distribution
- 64% of the sources are Center
64% Center
L 18%
C 64%
R 18%
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