Analytics groups Gartner and S&P Global fell 21 per cent and 11 per cent, respectively, while Intuit and Equifax both declined more than 10 per cent. Moody\u2019s fell 9 per cent and FactSet lost 11 per cent. <\/p>\n
A JPMorgan index tracking US software stocks fell 7 per cent, taking its loss this year to 18 per cent.<\/p>\n
\u201cSoftware is getting a shellacking,\u201d said Charlie McElligott at Nomura. <\/p>\n
\u201cThe irony, the hilarity, is that everyone was breathing a big sigh of relief on the AI hyperscaler trade after Oracle got funding yesterday,\u201d he added, referring to the software group\u2019s several-times-subscribed $25bn bond offering on Monday. \u201cThe second-order impacts of the AI rollout are being felt today.\u201d<\/p>\n
Index heavyweights were caught up in Tuesday\u2019s sell-off, with chipmaker Nvidia down 2.8 per cent and Microsoft losing 2.9 per cent to extend its recent decline. Oracle dropped 3.4 per cent. <\/p>\n
\u201cAll the software players are clients of the hyperscalers\u201d such as Amazon, Microsoft and Alphabet, said Mike O\u2019Rourke at Jones Trading. \u201cIf the guys who are supposed to buy the computing power are being disrupted, that\u2019s bad for the hyperscalers, too.\u201d<\/p>\n
\u201cIf legal can be disrupted [by Anthropic\u2019s new tool] then so can consulting and financial services,\u201d he added.<\/p>\n
AMD, an AI<\/a> chip rival to Nvidia, fell about 8 per cent after market on Tuesday despite the company beating Wall Street estimates both on last quarter\u2019s revenue and its $9.8bn sales forecast for the current quarter.\u00a0<\/p>\n Chief executive Lisa Su said the company was \u201centering 2026 with strong momentum\u201d led by \u201crapid scaling\u201d of its data centre business. A deal<\/a> with OpenAI last year established the start-up as the first customer for AMD\u2019s upcoming MI400 AI chips, which compete with Nvidia\u2019s.\u00a0<\/p>\n But investors are fretting about skyrocketing memory chip costs driven by data centre demand eating into the margins of large US tech companies such as AMD, Intel and Apple.<\/p>\n Many investors have in recent months trimmed their positions in software stocks as concerns over the risks of AI to the sector have mounted, leaving them easily spooked by new developments, according to Jeremy Abelson at Irving Investors.<\/p>\n \u201cPositioning is at multiyear lows and risks are at multiyear highs,\u201d Abelson said. \u201cI\u2019ve covered software for a long time and I\u2019ve rarely seen a day where almost everything is off by 4 to 15 per cent.\u201d<\/p>\n Private equity groups, many of which have piled into software in recent years, also fell sharply. Ares Management dropped 10 per cent, as did KKR, and Apollo fell 4.8 per cent.<\/p>\n Others pinned the scale of Tuesday\u2019s moves on herd mentality, with Steven Grey, chief investment officer at Grey Value Management, pointing to the \u201cimpossible-to-predict impact of AI\u201d upending stocks.<\/p>\n Tuesday\u2019s moves were reminiscent of the sharp market sell-off<\/a> in January last year that was triggered by the advances of Chinese AI start-up DeepSeek, whose emergence wiped hundreds of billions of dollars off the value of major US tech stocks.<\/p>\n Sectors including transport and consumer staples, which are viewed as relatively immune to AI disruption, advanced on Tuesday as software slipped.\u00a0<\/p>\n In London, information provider Relx took a hit of more than \u00a36bn alone.<\/p>\n Relx dropped 14.4 per cent on Tuesday, reversing the fortunes of one of the best-performing stocks in recent years and a company widely regarded as one of the UK\u2019s brightest hopes for AI success. Relx owns the leading legal information and analytics platform LexisNexis.<\/p>\n Shares of rival publishers and analytics groups that support legal services also fell sharply, with Wolters Kluwer down 12.7 per cent on Euronext in Amsterdam.<\/p>\n Anthropic\u2019s new legal tool \u2014 which promises to automate contract reviews, compliance workflows and legal briefings \u2014 was among those launched to automate specific tasks within a company that also covers marketing and customer support. <\/p>\n Shares in European advertising companies also dropped sharply on Tuesday, with Publicis off 9 per cent and WPP down almost 12 per cent. In the US, Omnicom fell more than 11 per cent.<\/p>\n Traditional media companies such as Relx have reinvented themselves as data-led analytics businesses, with hopes that they will be among Europe\u2019s AI winners given their access to proprietary data and research.<\/p>\n Relx was in the UK\u2019s top 10 most valuable companies last year, just above Barclays, but recent investor fears over US tech companies bringing in AI tools aimed specifically at corporate clients have begun to erode its share price.<\/p>\n Recommended<\/p>\n
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