Observed Signal · Mar 19, 2026 · Market Commentary · Source: CNBC Technology · Impact: 3/5 · Sentiment: Negative
AI Disruption Fears Continue to Haunt Software Stocks
David Sambur, co-head of private equity at Apollo Global Management, told CNBC the selloff in software stocks driven by fears of AI disruption is likely far from over. He said software companies face intensified competition from players such as Anthropic and OpenAI, creating uncertainty around revenue models, gross margins and valuations. Sambur warned AI-driven displacement is occurring faster than in his career and that markets are pricing in greater margins of safety for these "very large unknowns." He noted conservative corporate guidance and pointed to buying opportunities from deals or share repurchases. Several software firms including Intuit, Hubspot and Salesforce have announced buybacks, though RBC Capital’s Rishi Jaluria said buyback news is largely overshadowed by AI concerns and could limit future M&A activity.
A leading private-equity executive warned of prolonged AI-driven disruption to software valuations, highlighting competitive pressure from major AI labs and implications for buybacks and M&A — a notable investor view that affects market sentiment and capital allocation in the software sector.
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Key Takeaways & Evidence Grounding
- David Sambur, co-head of private equity at Apollo Global Management, said the software selloff from AI fears is "very early" and likely to continue.
- The IGV Software ETF climbed about 3% in March but remains down approximately 20% year-to-date.
- Sambur cited intensifying competition from Anthropic and OpenAI as a driver of scrutiny on software revenue models, margins and valuations.
- Software companies including Intuit, Hubspot and Salesforce have announced share repurchase programs.
- RBC Capital's Rishi Jaluria wrote that buyback announcements are being overshadowed by AI fears and may reduce the likelihood of future M&A.
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AI Disruption: Software Stocks Face Existential Threat
CNBC’s Tech Download reports that investor concern over AI-driven disruption has triggered major selloffs in large software stocks and sparked debate about the future of the SaaS business model. Analysts and investors warn that AI could replace substantial portions of enterprise software, pressuring vendors to adapt their products and go-to-market models. The piece cites examples of year-to-date stock declines at Salesforce, ServiceNow, Adobe and Intuit, and includes views from investors and analysts — including GAM Investments, Morningstar, Forrester and HSBC — who differ on the speed and scale of disruption. Some argue vertical, data-rich and industry-specific software is more resilient, while others warn horizontal point solutions are most exposed. The newsletter also notes related market updates, including Stripe’s $159 billion secondary valuation and leadership changes at Amazon’s AGI lab.
Jim Cramer: AI Apocalypse Predictions Are Overblown
CNBC host Jim Cramer argued that while AI poses real challenges to enterprise software—pressuring margins and compressing price-to-earnings multiples—it does not spell extinction for software companies. On Mad Money he said software firms can adapt, merge, and deploy AI themselves to cut costs and survive, and criticized an earlier Citrini Research blog post for stoking an overblown market sell-off. Cramer pointed to Nvidia’s stronger‑than‑expected quarterly results and guidance as evidence of robust AI demand and said AI is reshaping the economy, creating productivity gains that can benefit sectors like banks, travel, and select retailers even as some software valuations normalize.
AI Fears Overblown, Says AWS CEO Amid Software Growth
Amazon Web Services CEO Matt Garman told CNBC that investor fears about AI models slowing growth in major software companies are overblown. Garman acknowledged AI is disruptive but argued large SaaS players have an advantage if they continue to innovate. The article notes technology stocks have sold off in 2026—iShares Expanded Tech-Software Sector ETF down ~24%—even as AWS reported fourth-quarter cloud revenue of $35.6 billion (about 24% growth) with a 35% operating margin. AWS serves enterprise software customers including Adobe, Intuit and Zillow and has grown business from AI model developers; Amazon disclosed a $38 billion OpenAI spending commitment in November. The piece cites ServiceNow's Q4 revenue growth (20.7% YoY) and examples of AI adoption in logistics and freight.
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