Software Stocks Roar Back After $2 Trillion AI Apocalypse Scare

Software stocks have staged a stunning reversal after months of deep selloffs, as investors abandon fears that artificial intelligence would render the entire industry obsolete. Earlier this year, software companies lost approximately $2 trillion in market capitalization—the largest non-recessionary 12-month drawdown in over 30 years—as panic spread that AI agents could execute workflows autonomously and make traditional per-seat licensing models obsolete. The S&P Software & Services Select Industry Index fell over 20%, compressing valuations and prompting analyst warnings of a "SaaSpocalypse."