Feb 24 (Reuters) – Investors were looking anew for signs of a bottom in beleaguered shares of software companies on Tuesday after an announcement that artificial intelligence startup Anthropic was partnering with an array of companies.
Software stocks have been pummeled in recent weeks, driven by fears their business models would be upended by AI tools, including those from Anthropic. On Tuesday, Anthropic said it was developing new tools, the so-called “plug-ins”, with its partners that could help with investment banking, wealth management and HR tasks.
“We feel positive to see companies partnering with Anthropic, and we think that that might be the next chapter of this discussion,” said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago.
The announcement came several weeks after news that Anthropic launched plug-ins for its Claude Cowork agent set off severe selling in a range of software and other stocks.
The software selloff marked a widening of AI-related fears that have haunted Wall Street in recent months, adding to concerns about pricey valuations and massive spending on data centers.
Worries about circular spending between major AI players increased on Tuesday after Advanced Micro Devices said it would sell up to $60 billion worth of AI chips to Meta Platforms in a deal that allows the Facebook owner to buy as much as 10% of the chip firm’s stock for a penny per share.
REBOUND FOR BEATEN DOWN SOFTWARE STOCKS
Some of Anthropic’s partners including FactSet, Salesforce’s Slack, and DocuSign rose following Tuesday’s news. FactSet climbed about 6%, Salesforce rose 4%, DocuSign gained 2.6%.
The S&P 500 software & services index rose 1.3%, although it remains down 23% in 2026, while the iShares Expanded Tech-Software Sector ETF added 1.9%.
The software index touched a 10-month low on Monday after Citrini Research laid out a 2028 scenario where unemployment rises to 10.2%, triggered by layoffs as AI rapidly turfs out software and delivery applications.
“Software stocks and the IGV particularly are just massively oversold. So any incremental news that we’re getting about more disruptions is like getting to a point where how much is priced in already,” said Dennis Dick, chief market strategist at Stock Trader Network.
“Some of this disruption is not imminent and a lot of this is probably years out yet. The market’s telling us that now.”
Kuby said his firm owns shares of LegalZoom, which announced a collaboration with Anthropic on Tuesday. LegalZoom shares rose 2.6% on Tuesday but were still down over 30% on the year.
“The conversation might change from disruption to what are the use cases, how does this benefit your business,” Kuby said. “It’s been such a one-sided conversation on the disruption side.”
A week-long selloff earlier this month wiped out about $1 trillion in market value on Wall Street that analysts dubbed ‘Software-mageddon’ and hurt sectors spanning from software to logistics companies on both sides of the Atlantic and India.
And risks could remain. Just on Monday, Anthropic said its Claude Code tool could be used to modernize a programming language run on IBM systems, resulting in the biggest daily drop in shares of the legacy company in more than 25 years. IBM shares were up 2.7% on Tuesday.
(Reporting by Johann M Cherian, Sruthi Shankar and Purvi Agarwal in Bengaluru, Lewis Krauskopf in New York; Editing by Shinjini Ganguli and Lincoln Feast)
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