Several software stocks were on the decline Tuesday after Anthropic released the latest iteration of its Claude AI model, the Google- and Amazon-backed startup’s second major release in as many weeks, further fueling concerns the technology could disrupt markets.
The Google- and Amazon-backed AI startup fueled a global selloff in software stocks earlier this month.
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Key Takeaways
- Shares of Oracle dropped 3.4% to around $154 as of Tuesday afternoon, adding to declines for Thomson Reuters (3%), Salesforce (2.7%), Intuit (5.2%) and Adobe (1.4%).
- Enterprise software provider ServiceNow’s stock fell 1.1%, Atlassian declined 3.1%, Applovin fell 2.5%, while Palo Alto Networks and Autodesk decreased by more than 2%, after the firms’ stocks had dropped more than 11% and 23% on the year, respectively.
- The iShares Expanded Tech-Software ETF, which holds equity in software firms like Microsoft, whose shares decreased by more than 1% on Tuesday, Oracle and Applovin, dropped 2% and is down more than 22% on the year.
What Do We Know About Anthropic’s Claude Sonnet 4.6?
Anthropic on Tuesday released Claude Sonnet 4.6 for both free and paying users, calling the latest iteration a “full upgrade” of the model’s skills across coding, computer use, “long-context” reasoning, agent planning, knowledge work and design. The company said the model “certainly still lags behind the most skilled humans at using computers,” but noted its “rate of progress is remarkable nonetheless” and that Sonnet 4.6 provides “much-improved coding skills” to its users.
Key Background
Anthropic released plugins for its Claude Cowork AI agent earlier this month, claiming the model could automate tasks for customer service, product management, market, legal and data analysis, among others. That sparked concerns that multiple industries could be disrupted by the rapid development of AI, leading to a global selloff in software stocks, including declines for some of India’s largest IT firms and Japan’s Nomura Research, which plunged to a 52-week low. In a survey of fund managers by Bank of America released Tuesday, about 25% of respondents said concerns that AI-exposed stocks are overinflated is a top risk to markets, while 30% said increased spending on AI could lead to a credit crisis. Alphabet, Amazon, Meta, and Microsoft projected about $610 billion in spending for 2026, citing growing demand for AI products.
But Economists Warn Investors May Be Overreacting
Adam Turnquist, LPL Financial’s chief technical strategist, wrote in commentary Tuesday that volatility across software and AI-exposed industries reflects a shift in the “market narrative” Among investors and not because business performance, revenue or profits have deteriorated. Markets appear to be pricing in the “worst-case scenario” that may not fully account for the sector’s strength, Turnquist wrote. WedBush Securities analyst Dan Ives told CNBC a broader selloff for software stocks in recent weeks is the “most disconnected trade I’ve ever seen in my career on Wall Street,” arguing companies that investors have pulled away from will likely be boosted by developments in AI. JPMorgan earlier this month called the view that AI companies would disrupt the software industry “broken logic” and that investor concern is overblown.
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