Software Sector Sees Worst 25-Year Selloff as AI Spending Faces Reckoning
Dan Ives warns current software sector decline is worst in 25 years, driven by valuation contractions at Microsoft and Salesforce as AI spending expectations recalibrate. Enterprise software shares have dropped sharply as investors question return on AI investments.
1. Historic Software Selloff
Dan Ives characterized the recent software stock decline as the worst he has witnessed in 25 years, highlighting steep valuation contractions at Microsoft and Salesforce. He noted that enterprise software equities have experienced double-digit percentage drops as growth expectations retracted.
2. Investor Concerns Over AI Returns
The downturn reflects a broader recalibration of AI investment assumptions, with investors demanding clearer revenue proofs from major software firms. Market pressure increased as companies struggle to justify premium multiples without tangible AI-driven profitability gains.