Signage outside ServiceNow headquarters in Santa Clara, California, US, on Thursday, September 4, 2025.
David Paul Morris | Bloomberg | getty images
Software stocks fell on Thursday due to disappointing results. service now And IBM This has further heightened fears that artificial intelligence tools and services will disrupt their businesses.
ServiceNow shares fell 17% on Thursday, its worst day ever. The company beat Wall Street estimates by a narrow margin on Wednesday, but said the conflict in the Middle East had created a “headwind” for quarterly subscription revenue. IBM beat earnings and revenue but maintained guidance. The stock dropped 9%.
sales force And hubspot Each declined by about 9%. Adobe And Yours were down about 7%, and Oracle Fell about 5%. weekday It fell 10% on Thursday, and has fallen more than 45% this year. iShares Extended Tech-Software ETF (IGV)which typically tracks the sector, fell about 5% on Thursday and is down about 18% this year.
The sector has been hit by concerns that AI tools from companies like Anthropic and OpenAI will displace long-standing cloud subscription models.
Tech’s biggest companies mostly report next week alphabet, Amazon, meta And Microsoft Results are planned to be released on Wednesday, followed by Apple One day later.
Those companies have fared much better than pureplay software vendors, largely because of their central position in the AI ​​boom. Microsoft, which has the most software exposure, has been worst hit, falling 14% this year.
Watch: ServiceNow, IBM’s first-quarter earnings decline
