Software stocks are notably weaker again on Tuesday, and all signs point to Claude's latest release, which allows users' computers to run tasks in their browsers, as the culprit. However, according to one market watcher, six other factors could be weighing on the sector today as well.
iShares Expanded Tech-Software Sector ETF (NYSE:IGV) is down 4.2% at the time of this writing. Across the group, Atlassian is down 8.6%, Salesforce is down 6%, Adobe is down 4%, SAP is down 4%, ServiceNow is down 5%, and Microsoft is down 3%, among others.
Mizuho Managing Director, Equity Trading, Daniel O'Regan said, while there isn't one clear answer to today's weakness, a host of small factors are weighing in, including Claude's latest release.
In addition, O'Regan points to a negative note from a boutique research firm on Atlassian. In the report, the firm said the company's partners are tracking slightly below plan for the quarter, while the outlook calls for a deceleration in growth in CY26.
He also points to an article by David George, General Partner and Head Growth Fund at Andreessen Horowitz - 'There are only two paths left for software'. In the article, George said the first path is to accelerate revenue growth by more than 10 percentage points year over year through the development of genuinely new AI-native products over the next 12 to 18 months. The second is to rebuild the business to achieve true operating margins above 40%, ideally reaching 50%, inclusive of stock-based compensation.
source https://www.investing.com/news/stock-market-news/software-is-sick-again-today-and-its-not-just-because-of-claude-4578189
