Artificial intelligence problems in the software industry don’t seem to be going away anytime soon, following the industry’s decline following Anthropic’s latest product and earnings update. Software prices have continued to fall this week, with the iShares Expanded High-Tech Software Sector ETF (IGV) falling on Wednesday, when much of the market was participating in the rally following President Donald Trump’s ceasefire announcement, and falling again on Thursday. IGV has fallen more than 4% since the beginning of the week. Some stocks, like Workday and Intuit, have fallen more than others, falling more than 15% this week. The uproar comes after Anthropic revealed this week that its revenue run rate is now more than $30 billion, up from $9 billion at the end of 2025. The company also rolled out the latest updates to its agent tools, including Claude Managed Agents, which reduce the time it takes developers to build their own agents. This has once again raised fears that the age of AI in software is upon us. IGV 5D Mountain iShares Expanded Technology Software Sector ETF (IGV) in the Past 5 Business Days “That artificial update was staggering,” Ben Reitzes, head of technology research at Melius Research, wrote in a note Wednesday, referring to the earnings run rate. “The exponential growth seen below stems from the launch of tokenized software to replace and augment the workforce. [total addressable market] That’s about tens of trillions. “The market is getting it right with SaaS,” Reitzes continued, referring to “software as a service.” “Anthropic was only worth $18 billion in January 2025, so no platform is safe from losing $1.4 trillion in SaaS market cap.” The Software-as-a-Service model is outdated, with IGV down more than 35% from recent highs and 28% in 2026. But Anthropic’s future earnings forecast worries researchers that the market has not yet factored in the full scale of the disruption, predicting that workflow automation could also hit large companies, such as Microsoft, a member of the Magnificent Seven. Reitzes said Amazon’s retail business could be threatened by agent-based AI, given that the company’s 365 products are at risk due to the inevitable layoffs of white-collar workers, while adding that Meta’s AI strategy also competes with Anthropic’s, adding that investors are picking the best companies in the market to emerge as AI winners, as many believe the recent offering is indiscriminate. Until it becomes clearer that the software has changed direction, it will remain on the sidelines for now. ”[I’m] “We’re pretty confident that not all software companies will be losers, but we’re also confident that there will be a lot of losers,” said John Belton, portfolio manager of GGRW ETF at Gabelli Funds. The portfolio manager said he will keep his exposure to software low until there are signs that sentiment stabilizes or starts to bottom out. In the meantime, the clear beneficiary of AI may continue to be hardware, similar to semiconductors, rather than software, Reitzes said. (SMH) significantly outperformed this week’s gains as of Thursday. “SaaS to avoid,” writes CNBC’s Gabriel Cortez.
