Market Brief: Nvidia CEO Rebuts Software "Death" Narrative **Date:** February 4, 2026 **Topic:** AI Market Volatility & Sector Commentary **The Core Update** Nvidia CEO Jensen Huang has forcefully rejected the "AI replacement" theory following a sharp global selloff in software stocks on Tuesday, February 3. Speaking at the Cisco AI Summit, Huang labeled the fear that artificial intelligence will render traditional software obsolete as **"illogical."** **Market Context: The Anthropic Trigger** A wave of panic selling hit the software sector yesterday after AI rival Anthropic released **"Claude Cowork,"** a new suite of automation tools marketed as capable of replacing complex white-collar workflows. Investors reacted negatively to the prospect of AI agents cannibalizing subscription-based business models, causing a "basket-style" liquidation of SaaS (Software as a Service) holdings. **Key Market Movements (Intraday/Close Feb 4)** * **Adobe (ADBE):** Plunged **~7%**, reflecting fears over creative workflow automation. * **Salesforce (CRM):** Dropped **~7%**, hit by concerns over AI agents replacing sales/service seats. * **Intuit (INTU):** Saw steeper declines of over **10%** in the initial rout. * **Global Impact:** The selling spread to Asia, with the Nifty IT index (India) tumbling nearly **5.5%** and heavyweights like Infosys losing **~6-7%**. * **Nvidia (NVDA):** Remained relatively resilient compared to pure-play software, trading near **$180** despite broader tech pressure. **Huang’s Counter-Narrative** While the market priced in an existential threat, Huang argued that the premise is flawed. He emphasized that AI models are "tool users" rather than "tool replacers." In his view, the next generation of AI will rely *more* on robust software infrastructure (databases, operating systems, enterprise platforms) to execute tasks, effectively increasing the value of the existing software stack rather than erasing it. **Sector Outlook** The divergence between hardware (infrastructure) and software (application) stocks has widened. While the "AI Factory" build-out continues to support semiconductor valuations, software companies now face a "prove it" period where they must demonstrate that AI is a revenue accelerant rather than a deflationary force.