Asian software stocks plunge after U.S. peers decline on fears over AI-led disruption

Source Domain: www.cnbc.com

Wall Street’s concerns over AI-driven disruption affecting software companies impacted Asian tech stocks, mirroring declines in U.S. peers.
Japanese software companies TIS, Trend Micro, and NS Solutions led the declines in Asia with drops over 15%, 8%, and nearly 7%, respectively.
IT companies in India also saw drops, with the Nifty IT index falling nearly 6%, and prominent firms like Tata Consultancy Services and Infosys dropping 5.8% and 6.2%.
Chinese software companies, including Kingdee International Software and Tencent, experienced significant declines, reflecting broader investor concerns about AI’s impact on software sectors.
Investors are reassessing the valuation of software stocks due to the competitive threat posed by AI tools introduced by companies like Anthropic.
Analysts suggest that for the software sector to recover, companies need to demonstrate AI’s potential as a growth catalyst rather than just a disruption risk, which may take time.
In the U.S., shares of companies such as ServiceNow, Salesforce, and Intuit dropped sharply, contributing to the Nasdaq Composite’s decline of 1.4% on Tuesday.

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