“AI is going to eat Software”, Wall Street is worried about the contemporary shifting trends. Previously, Software companies were considered the safest and most valuable investment worldwide, considering their usefulness and functionalities. Marc Andreesen proclaimed in 2011 that “Software is eating the world”, as all major businesses were taken over by software companies then.
The “SaaS-apocalypse”
The companies, including ServiceNow, Intuit, and Salesforce, generated billions via selling Software as a Service(SaaS). They used to charge businesses a fee for each seat or individual who used their software. This business was considered a money-making machine.
However, a new software apocalypse is revealing itself now. Investors are now realizing that there is no need to pay for ten seats to companies selling SaaS if a similar workload can be managed by only one AI agent. Therefore, the fast-paced technological advancements in AI are threatening the foundation of software companies.
Why Wall Street is Panicking
The terror has reached to the newest height in early 2026. Some of the factors that instigated a huge sell-off that melted down nearly 30% of the software sector’s value within a few months are:
AI Agents vs Traditional Apps: The innovative AI tools from start-ups like OpenAI and Anthropic are moving beyond chatting. They are now coming up with agents that can deal with complex areas like legal research, marketing, and accounting. Investors anticipate that these AI agents will not only become an integral part of apps, rather they are going to replace the whole apps.
Ending of Moat: Moat refers to something that safeguard you from competitors. Writing a code was considered a moat for a long time. But now, AI can help you in writing codes within a few seconds. This advancement has enabled companies to develop customised tools without paying heft subscription fee to giant software companies.
Technology Stress: AI is primarily targeting the software with a clunky look and feel. Therefore, Wall Street is punishing those software companies that do not have persuasive AI strategy.
Read: BTC Sinks Below $71K as Tech Rout Deepens
Therefore, the stock market has been divided into two groups:
The Winners: Picks and Shovels, companies like Nvidia, which manufacture chips powering AI are witnessing the rise in stocks
The Losers: Application companies, those selling software to users are observing a significant decrease in their stocks. The companies like Salesforce and HubSpot have recorded huge drops.
Final Thoughts
Software CEOs are navigating through this challenging situation by arguing that AI can improve their products instead of replacing them. They are of the view that businesses still value specialised and safe software over AI bots.
Nevertheless, Wall Street has not been convinced yet. The software is no longer the king. Investors are betting that the upcoming era will not be dominated by those who have the best code, but rather by those who have the best AI tool to write and replace that code.
