Software shares have plunged dramatically as fears about artificial intelligence disrupting traditional business models ripple through global markets. Stocks like Adobe, SAP, Microsoft and others have been hit hard, even as many firms continue to grow revenue and maintain strong cash flows. What looks like widespread sell-off may be a combination of valuation rerating and overblown sentiment — and for disciplined investors it could spell selective opportunities at historically low levels.

The software sector has entered a phase in recent weeks that resembles a much deeper market reset than just short-term waves of volatility. After decades of tech titles dragging the markets higher, being priced as growth stocks and their PE multiples skyrocketing, the situation has turned sharply. In both January and February 2026, stock prices of software companies plunged so sharply that some analysts are talking about a software massacre that wiped out hundreds of billions of dollars of market value…