Software stocks whipsaw amid AI fears, as Anthropic IPO looms

Software stocks experienced sharp, volatile moves as investors oscillated between AI optimism and fear. An AI-driven rally led by comments from Nvidia CEO Jensen Huang briefly lifted the sector about 6% before a sudden quant-driven sell-off wiped out gains — the iShares Expanded Tech-Software ETF fell 3% the next day. Individual software names saw large swings: Atlassian plunged ~8%, HubSpot and Okta fell ~7%, ServiceNow and Intuit lost ~6%, while Microsoft and other large-cap cloud names dropped 3–4%. Analysts blamed programmatic trading and factor basket rebalancing rather than a near-term change in fundamentals. Separately, AI specialist Anthropic confidentially filed a draft S-1 with the SEC for a possible IPO, underscoring continued investor appetite for pure-play AI firms even as legacy software grapples with AI-driven disruption.