Software Selloff Deepens After Anthropic Rolls Out Cowork Legal Tools
Wall Street is compressing software valuations on fears that AI will undercut vendors' business models.
Overview
- Shares of major software names fell sharply on Tuesday, with ServiceNow and Salesforce each down about 7% and Intuit off nearly 11%, as the Nasdaq Composite slipped 1.4%.
- Investors pointed to Anthropic’s new legal tools for its Cowork product as the latest catalyst for selling across the software sector.
- CNBC’s Jim Cramer urged caution, noting reported profits have not collapsed but price-to-earnings multiples are being marked lower due to uncertainty about AI.
- Market flows are favoring large companies seen as heavy software users, and winners cited on the day included Procter & Gamble, FedEx and Union Pacific.
- Cramer said his CNBC Investing Club bought CrowdStrike, arguing cybersecurity providers may be more defensible against AI-driven replication than broader software vendors.