{"id":455747,"date":"2026-02-05T15:53:17","date_gmt":"2026-02-05T15:53:17","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/455747\/"},"modified":"2026-02-05T15:53:17","modified_gmt":"2026-02-05T15:53:17","slug":"down-arrow-button-icon-13","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/455747\/","title":{"rendered":"Down Arrow Button Icon"},"content":{"rendered":"

Until very recently, the narrative around AI was that the $600 billion of annual corporate capital expenditure (\u201ccapex\u201d) fueling it<\/a> was good for stocks in the short term. The companies receiving that money as new revenue (AI model makers, data center constructors, and the energy companies supplying them) would be the immediate beneficiaries. The efficiencies delivered by AI would be good for tech and non-tech companies alike. The Big Tech hyperscalers have always argued that the demand from their revenue-paying clients far exceeded their ability to supply AI services.\u00a0<\/p>\n

That narrative was turned on its head in the past 24 hours as it dawned on traders that AI also has the ability to reduce the revenues of a vast range of adjacent tech companies.\u00a0<\/p>\n

The argument\u2014advanced by Palantir CEO Alex Karp and CTO Shyam Sankar on their recent earnings call<\/a>\u2014is that AI is now so good at writing or managing enterprise software that it threatens to make irrelevant a range of tech companies that have, for years, enjoyed recurring revenues by providing enterprise apps to companies on a software-as-a-service (SaaS) basis.\u00a0<\/p>\n

That led to a widespread selloff of tech stocks, wiping away $300 billion in market cap in a single session<\/a>.<\/p>\n

S&P 500 futures were flat this morning after closing down 0.84% last night.<\/p>\n

SaaS companies took major hits: Microsoft<\/a> closed down 2.87%; SAP<\/a> was down 3.29% this morning on the German market; Salesforce<\/a> lost 6.85% yesterday and was further down in overnight trading; ServiceNow<\/a> was down 6.97% yesterday and was marginally lower overnight also.<\/p>\n

Palantir\u2019s Sankar said on the call that his company\u2019s \u201cAI forward deployed engineer\u201d product\u2014which allows clients to manage software and codebases through natural language commands\u2014is able to reduce the time it takes to complete \u201ccomplex SAP ERP migrations\u201d from \u201cyears of work\u201d to \u201cas little as two weeks.\u201d (ERP stands for \u201centerprise resource planning,\u201d and it refers to a service offered by SAP<\/a> around helping companies transition from aging legacy systems into new ones.)<\/p>\n

Karp added: \u201cIn the American market, we have inbound [requests from clients] where people have already seen proof points at other companies and not on one use case. [There is] a myriad of use cases.\u201d<\/p>\n

Jefferies analysts Akshat Agarwal and Ayush Bansal\u2014who focus on Indian enterprise tech companies\u2014published a note this morning arguing that AI has the ability to reduce the revenues of a wide range of tech companies:<\/p>\n

\u201cAnthropic\u2019s Cowork plug\u2011ins and Palantir\u2019s claims of faster SAP migrations highlight how AI could potentially erode application service revenues for IT firms. With application services being 40% to 70% of revenues [for tech companies in India], IT firms face growth pressures. Consensus growth estimates don\u2019t fully reflect this, posing downside risk to valuations,\u201d they warned. Claude Cowork is like a general purpose work assistant<\/a> that can organize tasks and files autonomously.<\/p>\n

\u201cSoftware stocks have been correcting on the back of this, however, we believe the impact of this could extend well beyond software\u2014potentially disrupting downstream application\u2011managed services (AMS) revenues for IT services firms.<\/p>\n

\u201cOur checks suggest that use of AI is clearly compressing migration timelines which in turn may drag application implementation revenues for IT services firms,\u201d they added. \u201cAI is going to be drag on revenue growth of IT firms over the next one to two years.\u201d\u00a0<\/p>\n

Ed Yardeni of Yardeni Research made a similar argument in a note to clients: \u201cSoftware stocks were especially hard-hit because Anthropic rolled out new tools for its Cowork product. It\u2019s too soon to tell how useful the new tools will be, but investors decided to cut the valuation multiples of software stocks.\u201d<\/p>\n

SAP refuted Karp\u2019s point of view. \u201cAI agents will massively push the boundaries of the performance of SaaS solutions, but not replace them,\u201d the company told Fortune. A spokesperson argued that SaaS vendors will be the primary beneficiaries of AI because SaaS vendors have the data, the processes, and semantics that AI agents need to work.<\/p>\n

\u201cCompanies still need a trusted source of truth to run the business. AI agents need clean, structured data and proven processes to produce reliable results,\u201d the spokesperson said.<\/p>\n

Here\u2019s a snapshot of the markets ahead of the opening bell in New York this morning:<\/p>\n

S&P 500 futures were flat this morning. The last session closed down 0.84%.<\/p>\n

The STOXX Europe 600 was down 0.18% in early trading.<\/p>\n

The U.K.\u2019s FTSE 100 was up 0.83% in early trading.\u00a0<\/p>\n

Japan\u2019s Nikkei 225 was down 0.78%<\/p>\n

China\u2019s CSI 300 was up 0.83%.<\/p>\n

The South Korea KOSPI was up 1.57%.<\/p>\n

India\u2019s Nifty 50 was flat.<\/p>\n

Bitcoin declined to $76K.<\/p>\n

Join us at the Fortune Workplace Innovation Summit May 19\u201320, 2026, in Atlanta. The next era of workplace innovation is here\u2014and the old playbook is being rewritten. At this exclusive, high-energy event, the world\u2019s most innovative leaders will convene to explore how AI, humanity, and strategy converge to redefine, again, the future of work. Register now<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"Until very recently, the narrative around AI was that the $600 billion of annual corporate capital expenditure (\u201ccapex\u201d)…\n","protected":false},"author":2,"featured_media":455748,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[62,1930,276,277,49,48,100,40553,2511,61],"class_list":["post-455747","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-anthropic","tag-artificial-intelligence","tag-artificialintelligence","tag-ca","tag-canada","tag-markets","tag-palantir-technologies","tag-stock","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/455747","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=455747"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/455747\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/455748"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=455747"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=455747"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=455747"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}