The question of how artificial intelligence (AI) will change the software business has prompted RBC Capital Markets to cut price targets on a swath of Canadian technology stocks.

In a note to clients on Monday, analyst Paul Treiber says names like Shopify (SHOP.TO)(SHOP) and Constellation Software (CSU.TO) have been “roiled by AI disruption fears.” His remarks echo recent commentary from a senior economist at the world’s second-largest asset manager. Last week, Vanguard Group’s Kevin Khang warned of “a lot of hype” in the U.S. equity market, and a “sea change” away from 2025’s AI-fuelled Magnificent Seven dominance.

“While we believe that the pullback in software valuations is an overreaction, as we believe software will evolve to incorporate, rather than be disrupted by, new AI innovations, we are lowering our price targets to reflect higher risk premiums on software and reduced peer valuations,” Treiber wrote on Monday.

RBC lowered its price targets on CGI (GIB-A.TO) from $165 per share to $150, Constellation from $5,600 to $4,800, Kinaxis (KXS.TO) from $235 to $200, Lumine (LMN.V) from $50 to $42, Open Text (OTEX.TO) from $35 to $33, Topicus.com (TOI.V) from $190 to $160, and Vitalhub (VHI.TO) from $13 to $12.

The iShares S&P/TSX Capped Information Technology Index ETF (XIT.TO), which includes several of the above companies, has lost nearly nine per cent year-to-date.

“Canadian software stocks, roiled by AI disruption fears, continue to see valuation multiples compress,” Treiber added. “Negative sentiment may persist in the short term.”

From filing taxes to applying for jobs, software is by no means the only arena where looming questions about the pace and impact of AI adoption are making humans nervous.

RBC says Celestica (CLS.TO)(CLS), Shopify, and Kinaxis are the strongest contenders in software ahead of calendar fourth-quarter earnings.

CGI and Celestica are due to report their latest financial results on Wednesday. Shopify’s earnings are scheduled before markets open on Feb. 10, Kinaxis’ are due on Feb. 25, and Constellation will announce theirs on March 6.

Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on X @jefflagerquist.