Overview
- The S&P 500 software cohort has fallen roughly 18% over six months versus a 9% gain for the index, with SAP down about 30% and Salesforce and ServiceNow off roughly 20% and 40%, respectively.
- Shares of Microsoft, ServiceNow and SAP slid after earnings despite solid results, as investors questioned growth durability and cloud backlog momentum.
- Analysts describe a sector “shadow of uncertainty,” noting slow enterprise uptake of agentic AI even as incumbents roll out tools like Copilot, Agentforce and Snowflake Intelligence.
- Zoho founder Sridhar Vembu frames the drop as overdue repricing from stretched multiples toward 10–15x earnings and highlights a chance for Indian IT services to replace costly platforms and deliver 60–80% savings.
- Market flows favor AI infrastructure such as semiconductor leaders like Nvidia, while worries grow that enterprises could build in-house with LLMs or turn to AI‑native startups including Aurasell and Artisan AI.