Software stocks decline on AI disruption fears
Software shares dropped Thursday after IBM and ServiceNow reported slowing growth in key segments. Investors remain cautious about how AI impacts long-term returns.
The United States software sector faced significant downward pressure in premarket trading this Thursday as quarterly reports from industry leaders sparked renewed anxiety regarding artificial intelligence (AI) disruption. Despite reporting figures that exceeded analyst expectations, the underlying metrics for major players suggested a shifting landscape where AI is viewed as both a catalyst and a potential threat to traditional business models.
INTL BUSINESS MACHINES CORP saw its shares tumble 7.4% after the company revealed a slowdown in revenue growth during the first quarter. The decline was primarily attributed to weakness within its software division, specifically the Red Hat cloud unit, which saw growth decelerate to 11.3%. This performance underscored investor sensitivity to any signs of friction in enterprise software adoption.
