Salesforce and ServiceNow Lead $70.5B Buybacks as Software Index Falls 28%
U.S. software companies have authorized $70.5 billion in stock buybacks since January 12, quadruple the year-ago level, with Salesforce adding $30 billion and ServiceNow approving $5 billion plus a $2 billion accelerated buyback. The S&P 500 software index is down 28% since late October, yet investors doubt buybacks will offset AI-driven disruption.
1. Sector Selloff
Software stocks have plunged amid concerns over rapid AI developments, driving the S&P 500 software index down 28% since late October as investors struggle to value companies in a shifting competitive landscape.
2. Buyback Surge
Since January 12, U.S.-listed software firms have announced $70.5 billion in repurchase plans, nearly four times the volume from a year earlier. Salesforce boosted its program by $30 billion, while ServiceNow approved an extra $5 billion and launched a $2 billion accelerated buyback.
3. Investor Sentiment
Despite the flurry of buyback announcements, strategists warn share repurchases alone may not restore confidence. They argue proof is needed that AI innovations will not erode core business models, with some investors favoring companies that demonstrate resilient fundamentals alongside repurchase activity.