Global tech stocks lose $830 billion amid AI disruption fears

Thursday 05 February 2026 - 13:50

By: Dakir Madiha

Global tech stocks lose $830 billion amid AI disruption fears

A relentless sell-off in technology stocks showed no signs of easing Wednesday as investors dumped software company shares over growing concerns that artificial intelligence will upend their business models. Sparked by Anthropic's launch of Claude Cowork AI plugins on January 30, the rout has now wiped about $830 billion in market capitalization from global software and tech services firms since late January.

The Nasdaq Composite fell 1.5 percent Wednesday to close at 22,904.58, marking its worst two-day performance since October 2025 with a nearly 3 percent drop over the sessions. The iShares Expanded Tech-Software Sector ETF entered bear market territory, down more than 20 percent from its recent peak.

Cowork plugins enable AI agents to automate tasks like legal document review, sales prospecting, financial analysis, and other corporate functions capabilities that rattled investors questioning the viability of traditional software-as-a-service models. Anthropic released 11 open-source plugins covering productivity, marketing, customer support, and data analysis at launch.

Major software firms posted steep declines this week. ServiceNow dropped 7.1 percent Tuesday, with year-to-date losses at 26 percent. Intuit, TurboTax's parent, shed nearly 11 percent, pushing 2026 losses over 34 percent. Salesforce fell about 7 percent, while Adobe, Microsoft, and Oracle also declined. Palantir plunged 9 percent Wednesday amid a broader tech rotation.

JPMorgan analyst Toby Ogg captured the gloomy mood: "We're now in an environment where the sector isn't just guilty until proven innocent it's condemned before trial."

The sell-off spread to Asia and Europe Thursday. South Korea's Kospi tumbled nearly 4 percent, Taiwan lost 1.1 percent, and Japan's Nikkei 225 dipped 0.7 percent. India's Nifty IT index plunged almost 6 percent, dragging down IT services giants Tata Consultancy Services and Infosys. Advanced Micro Devices shares cratered 17 percent after disappointing quarterly results, compounding sector woes.

Not all observers see the panic as warranted. Bank of America analysts called the market reaction "internally inconsistent," noting investors seem to expect both reduced AI investment returns and such widespread AI adoption that it obsoletes software. "These two scenarios can't happen simultaneously," they wrote. William Blair analysts dubbed Cowork the latest "software sector boogeyman," likening the drop to the unfounded January 2025 plunge triggered by DeepSeek.