Global Software Selloff Intensifies: February 2026 Market Brief **Market Update** Global software stocks are in the midst of a severe correction as of early February 2026, driven by intensifying fears that autonomous AI agents will displace, rather than enhance, traditional enterprise software. A massive selloff occurred on **February 3–4**, triggered by Anthropic’s release of new "Claude Cowork" automation plugins. These tools, capable of executing complex workflows in law, sales, and data analysis without human intervention, have sparked a "SaaSpocalypse" narrative, leading investors to question the long-term viability of the seat-based SaaS business model. **Key Performance Indicators** * **Sector Impact:** The iShares Expanded Tech-Software Sector ETF (IGV) plunged **4.6%** in a single session and is down nearly **15%** since the start of January 2026, marking its worst monthly performance since 2008. * **Major Indices:** The Nasdaq-100 faced intraday declines of up to **2.4%**, weighed down heavily by software components despite resilience in hardware and semiconductor stocks. * **Company Specifics:** Legacy giants bore the brunt of the downturn. **Adobe (ADBE)** and **Salesforce (CRM)** saw single-day drops of **5% to 7%**, with Adobe trading near three-year lows (down roughly **32%** year-over-year). **ServiceNow (NOW)** plummeted to **$109**, erasing gains from its previous all-time highs of **$239**. * **International Contagion:** The selloff extended globally, with Indian IT majors like **Infosys** and **TCS** falling **6–7%**, and Japanese software firms like **TIS Inc.** dropping over **15%**. **Sentiment & Outlook** The market is currently pricing software stocks as "guilty until proven innocent." Investors are rotating capital out of application-layer software and into AI hardware and infrastructure. However, a counter-narrative is emerging among value-focused analysts. With valuations for the software sector compressing to record lows (some trading at **12x to 18x** forward earnings), some strategists argue the panic is overblown. They contend that legal and compliance barriers will slow the adoption of autonomous agents, potentially making the current price levels a buying opportunity for entrenched market leaders. [Yahoo Finance: Tech sector outlook and S&P 500 analysis for 2026](https://www.youtube.com/watch?v=GqUVULO2Ti8) This video offers a broader context on the 2026 tech landscape and S&P 500 performance expectations that preceded the specific February software downturn. http://googleusercontent.com/youtube_content/0