So Wall Street is having another one of its classic freak-outs, and this time it’s about AI supposedly coming for software companies’ lunch money. You know how this goes: someone whispers “disruption” and suddenly everyone’s selling like the apocalypse is tomorrow.
Enter Jensen Huang, Nvidia’s leather-jacket-wearing CEO and unofficial AI prophet, who basically looked at this whole mess and said, “Are you kidding me right now?”
Here’s what happened: Software stocks have been getting absolutely demolished lately. The iShares Expanded Tech-Software Sector ETF is down a brutal 22% year-to-date, and it officially entered bear market territory last week. Ouch.
The panic started when Anthropic (you know, the ChatGPT rival) dropped some new AI tools that can apparently handle legal paperwork. Suddenly, investors started imagining AI robots taking over every software job from accounting to legal research. Classic Wall Street logic: see one shiny new thing, assume it destroys everything else.
But Huang wasn’t having it. At a Cisco AI event, he dropped this gem: “There’s this notion that the tool industry is in decline and will be replaced by AI… It is the most illogical thing in the world and time will prove itself.”
His point? AI doesn’t want to replace software – it wants to use it. Think of AI as that really smart friend who borrows all your tools instead of buying their own. Why would AI reinvent Excel when it can just get really, really good at using Excel?
Huang specifically name-dropped ServiceNow, SAP, Cadence, and Synopsis as companies that should be thriving in an AI world, not dying. These aren’t companies AI wants to eliminate – they’re the infrastructure AI needs to actually do useful stuff.
Meanwhile, the carnage continues. Palantir dropped 7.5%, AppLovin got crushed by 16%, and Unity Software fell 9%. Even crypto-adjacent plays like Hut 8 Corp took an 11% hit. It’s like watching dominoes fall, except each domino is worth billions of dollars.
Here’s the thing though: this might actually be healthy. Sometimes markets need a good reality check, and rotating money out of overvalued tech into other sectors isn’t the worst thing in the world. Plus, if you believe Huang (and his track record is pretty solid), this selloff might be creating some serious buying opportunities.
The irony? Nvidia itself isn’t immune to this mess – even the AI king’s stock has been wobbling as investors try to figure out what the hell is going on.
So what’s the takeaway? Maybe don’t panic-sell your software stocks just because AI learned how to fill out legal forms. And maybe, just maybe, listen to the guy who’s been right about AI trends for the past few years when he says everyone’s being “illogical.”
Time will tell if Huang’s right, but betting against the leather jacket has been a losing strategy so far.