The Great Software Reckoning

The Great Software Reckoning | When AI Became the Disruptor

Software stocks have entered a period of significant turbulence, with major players like Salesforce, Adobe, and ServiceNow declining by 30% or more since the start of 2025. The catalyst?

A fundamental reassessment of the sector's growth prospects in an AI-dominated landscape. The emergence of "vibe coding" and sophisticated AI development tools has sparked fears that traditional software business models—once celebrated for their subscription-based stability—may face structural headwinds.

Credit markets are responding accordingly, with software loan spreads widening even as broader loan markets tighten. For investors, the question is no longer whether AI will reshape software, but which companies will adapt and which will become casualties of the disruption they once promised to others.

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