Shares of European software firms sank on Tuesday, led by SAP (ETR:SAPG) and Sage Group (LON:SGE), as concerns swirled around the impact of artificial intelligence on these businesses.
In mid-afternoon deadmaking in Europe, SAP’s stock price slumped by as much as 4.7%, falling to its lowest level since April. Sage also dropped by 5.4%, while Nemetschek (ETR:NEKG) shed over 7%, Dassault Systemes (EPA:DAST) dipped by more than 2%, and Sinch (ST:SINCH) lost 3.7%.
A basket of these stocks covered by UBS was down by roughly 3%.
According to Bloomberg News, the worries over AI-fueled headwinds were partially exacerbated by a recent Melius Research downgrade of U.S. peer Adobe (NASDAQ:ADBE), with analysts arguing that the nascent technology could pose a threat to the Photoshop-maker.
Meanwhile, these fears were fanned even further by results from Monday.com (NASDAQ:MNDY). The software group guided for current-quarter revenue of $311 million to $313 million, disappointing Wall Street projections at the midpoint and overshadowing better-than-anticipated second-quarter results.
Analysts at Jefferies said in a note that the nearly 30% slide in the company’s shares on Monday was evidence that some investors are fretting about the long-term effects of AI on the "entire apps software space." Still, they argued that these fears are "overblown."
Monday.com shares had inched up in premarket U.S. trading on Tuesday.
Source :
https://www.investing.com/news/stock-market-news/european-software-stocks-drop-amid-worries-over-aipowered-competition-4184728
