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Wall Street’s fears around artificial intelligence-driven disruption affecting software companies continued to put pressure on global stocks on Wednesday.
In premarket U.S. trade on Wednesday morning, ServiceNow and Salesforce each shed about 0.4%, while Intuit was down by 0.7%. Nvidia extended losses from the previous day, trading 0.3% lower ahead of the opening bell in New York.
During Tuesday’s session, shares of ServiceNow tumbled nearly 7%, pushing its year-to-date losses to 28%. Salesforce also dropped about 7%, bringing its 2026 decline to almost 26%. Intuit, the TurboTax parent, fell nearly 11% and is now down more than 34% year to date. Those moves contributed to the tech-heavy Nasdaq Composite sliding 1.4% on Tuesday.
In Europe, software-related stocks also plummeted on Tuesday. The Stoxx Europe Software and Computer Services index shed more than 5% during the session, with British information analytics company RELAX losing more than 14%, while French IT giant Capgemini was down 9.2% by the closing bell.
On Wednesday morning, European software stocks were building on those losses, with the software index losing a further 1.9%. Navigation tech firm TomTom was down 12.5%, leading losses, while Trust pilot was down more than 7% and German management software developer Atoss was 6.4% lower.
During the Asian trading session on Wednesday, Japanese software firms led regional declines. TIS, a major Japanese information technology services provider and systems integrator, plunged almost 16%. Trend Micro lost over 7%, while NS Solutions also declined more than 7%.
Shares of IT companies in India also dropped, with the Nifty IT index down 5.8%. Major IT firms Tata Consultancy Services and Infosys dropped 7% and 7.3%, respectively, while HCL was down 4.3%
Indian IT companies were among the top gainers on Tuesday, following the announcement of the country’s trade deal with the U.S.
Chinese software companies sold-off as well. Shares of China’s Kingdee International Software plunged more than 12%, while cloud major Tencent fell 4%. Alibaba lost close to 1%, while Baidu was down 3%.
“AI has turned technology into an even more competitive sport,” said Ed Yardeni, president of Yardeni Research.
“Software stocks were especially hard hit because Anthropic rolled out new tools for its Cowork product,” he said. “It’s too soon to tell how useful the new tools will be, but investors decided to cut the valuation multiples of software stocks.”
Software firms once valued for their sticky subscriptions and dependable renewals are now under scrutiny as AI threatens to automate workflows, squeeze pricing, and lower the barriers for new rivals to enter the market.
“For the sector to rerate, companies must show that AI can act as a growth enabler rather than just a competitive threat – this may take longer than usual in the face of skeptical investors,” said Vey-Sern Ling, senior equity advisor at UBP.
UBP prefers infrastructure software where the risk of AI disruption is low, as well as cybersecurity where there is pricing power and AI can potentially drive upsell opportunities, Ling said.
— CNBC’s Chloe Taylor contributed to this report.
