Anthropic's AI Tool Launches Trigger $68.6 Billion Rout in Indian IT Stocks

Indian shares trail regional peers on $68.6 billion IT rout over AI concerns

Feb 25 (Reuters) - Indian shares have lagged their Asian and emerging market peers so far in February, pressured by a $68.6 billion rout in the market value of information technology stocks, as investors fretted over disruptions linked to artificial intelligence. The Nifty 50 index (.NSEI), opens new tab has risen 0.4% so far this month, while the Sensex (.BSESN), opens new tab edged 0.1% lower, underperforming both the MSCI Asia ex-Japan and MSCI Emerging Markets indexes. The 10 Nifty IT constituents (.NIFTYIT), opens new tab have lost a combined $68.6 billion in market capitalisation in February, as of the last close, with the index down 21% and on course for its worst monthly performance in nearly 23 years. All 10 index members have fallen between 16.8% and 27% in February to date. Coforge (COFO.NS), opens new tab is the steepest percentage decliner, down 26.8%, while Tata Consultancy Services (TCS.NS), opens new tab and Infosys (INFY.NS), opens new tab have led the value erosion, losing about $21.9 billion and $16.3 billion in market value, respectively. The selloff reflects growing concerns that rapidly advancing automation tools could compress project timelines and disrupt the labour-intensive delivery model underpinning India's roughly $300-billion IT services industry. Investors have zeroed in on the AI-driven automation push from U.S. firms such as Anthropic and Palantir, heightening concerns over faster project execution, pricing pressure and reduced billable hours. Brokerages warn the Indian IT sector could face further pressure if AI starts to eat into application services revenue, which typically accounts for 40% to 70% of total revenue for these companies. "There are no easy answers to whether AI eventually renders IT services obsolete over the long term," said analysts led by Abhishek Pathak of Motilal Oswal. "The narrative that AI is coming for not just IT but large swathes of the economy could be too strong to shake, at least in the short term," Motilal Oswal analysts said. A slowdown or contraction in India's IT sector, whether through layoffs or reduced hiring, can have immediate consequences on both residential and commercial real estate demand. The Nifty Realty index (.NIFTYREAL), opens new tab has risen roughly 2% in February, following a nearly 18% decline over the past three months. Concerns over Indian IT companies have also accelerated foreign selling in the sector in 2026 so far. While FPIs have turned buyers of Indian stocks in February on an overall basis, they pulled out about 110 billion rupees ($1.21 billion) from IT stocks in the first half of February, following a record 750 billion rupees of net selling in 2025. ($1 = 90.8980 Indian rupees) Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sherry Jacob-Phillips Our Standards: The Thomson Reuters Trust Principles., opens new tab

Software stocks rebound as Anthropic announces new partnerships

The market is 'very spooked' on recent AI fears, says SandboxAQ's Jack Hidary Software stocks made a comeback on Tuesday after Anthropic hosted its enterprise agents event, where it revealed new partnerships, quelling some investor fears that the sector could be displaced by artificial intelligence. The AI startup launched new updates to Claude Cowork that allow companies to integrate the productivity tool into a host of enterprise apps, such as Salesforce-owned Slack, Intuit, Docusign, LegalZoom, FactSet and Google's Gmail. Organizations can also deploy customizable plugins across sectors like financial analysis, engineering and human resources, Anthropic said.

Analysts' comments after Anthropic unveils new plug-ins

Feb 24 (Reuters) - Artificial intelligence lab Anthropic on Tuesday unveiled 10 new ways for business customers to plug in its technology to key areas of their work, weeks after other releases sparked an aggressive selloff of traditional software company shares. The San Francisco-based startup said its plug-ins could now help with investment banking tasks, such as reviewing deals, wealth-management tasks like portfolio analysis and human resource-related tasks, such as making new-hire materials reflect a brand's tone and policies. MARKET REACTION: The S&P 500 index (.SPX), opens new tab was up 0.6%, while Nasdaq (.IXIC), opens new tab rose 1%, boosted by technology shares. Salesforce advanced 3.4%, making it one of the biggest gainers on the blue-chip Dow (.DJI), opens new tab. The S&P 500 software and services index (.SPLRCIS), opens new tab climbed 0.5%, recovering some losses. It has lost 23.5% so far this year, as the sector grapples with AI-disruption fears. COMMENTS: ROBERT PAVLIK, SENIOR PORTFOLIO MANAGER, DAKOTA WEALTH, FAIRFIELD, CONNECTICUT: "Anthropic's been busy with announcements that their product is going to do all these new and sort of wonderful things. It's still early in the process and certainly acceptance and the application of these tools is probably still a ways away. I can see how parts of these products would be welcomed by corporations trying to reduce overhead and costs, if they work. "But we know from experience that you definitely need human intervention, otherwise problems develop. I don't think that people anticipate AI will taking over for real humans and real tasks. Regarding labor market disruption: "I think it's still too early to tell. I don't think adaptation or implementation of these AI products is that fully done yet. We're still a ways away from it being fully implemented in the actual workforce." KEN POLCARI, PARTNER AND CHIEF MARKET STRATEGIST AT SLATESTONE WEALTH IN JUPITER, FLORIDA: "Investment banking - that got hit a couple of weeks ago when they did the legal and financial services, so that was a known. Yesterday's reaction was so overdone that it can't help but bounce a little bit. I don't think it's going to hold. I think it's going to continue to weaken a little bit. The opening is just a reflection of the disaster that took place yesterday. I think it probably settles in and then trades lower again. Not like yesterday, but I think it churns lower. "There's some people getting fatigued. I also think there are some names that have gotten absolutely clobbered that are actually looking like opportunities. Even though they're down, and even though it's an AI story, and even though it's blah, blah, blah, everyone's talking negative, it does create an opportunity where there's some value in these stocks that have gotten crushed. "Some of it is that 'shoot first, ask questions later' mentality all driven by algorithms. And then like anything, the pendulum swings too far to the left and it swings too far to the right. "I'm not saying that AI is not going to disrupt the world. It clearly is. And it will continue to disrupt the world, but I don't think it's the end of the world. Like every industrial revolution, there'll be anxiety going through it, but then when it comes out the other side, there will be new opportunities. We don't know yet what they are. Some opportunities, they won't exist anymore. "I'm not in that camp that's lighting my hair on fire. I'm in a camp that as long as you remain relevant and change with it and keep yourself up to date and educated, then you just kind of move along." Our Standards: The Thomson Reuters Trust Principles., opens new tab

Frightful February for IT stocks: How Anthropic's 6 AI tools sparked a multi-billion dollar meltdown in 4 weeks

Indian IT stocks have seen a sharp downturn in February, with the Nifty IT index dropping 21%. This decline was triggered by new AI launches and capabilities from startup Anthropic, raising investor concerns about potential disruptions to the sector. Major IT firms experienced significant single-day losses following these developments. Indian IT stocks have recorded a significant decline so far in February, as new launches and comments from AI startup Anthropic spooked investors about the possibility of a disruption in the sector. The Nifty IT index has plunged 21% so far this month, after recording marginal gains in January. Here is a timeline of events leading to the massive single-day declines in the sector. After Anthropic launched plug-ins for its Claude Cowork agent which could automate tasks across legal, sales, marketing and data analysis, Wall Street ended sharply lower on February 3. This came as investors remained concerned that AI was creating more competition for software makers. The tech selloff spilled over to Dalal Street the next day, with Nifty IT index crashing 6% as heavyweights like Infosys, Tech Mahindra, LTI Mindtree, Tata Consultancy Services (TCS) and others fell up to 8% on February 4. "We call it the 'SaaSpocalypse,' an apocalypse for software-as-a-service stocks," Bloomberg quoted Jeffrey Favuzza from the equity trading desk at Jefferies as saying. The Nifty IT index declined around 1.5% on February 6 after Anthropic unveiled Claude Opus 4.6. The new version of the AI startup's flagship model is designed to handle complex financial research and a wide range of enterprise tasks that would normally take days for humans to complete. On this day, the index extended its decline for the third consecutive session, falling as much as 8% during the losing streak. The Nifty IT index tumbled 5.5%, accompanying Wall Street peers after a better-than-expected US January jobs report failed to boost investor sentiment amid concerns around AI-led disruptions. Later on February 13, the index dropped another 1.4% after Anthropic announced that any organization could purchase Claude Enterprise directly on its website with no sales conversation required. IT stocks declined again sharply on February 18, with Nifty IT index falling over 1% after Anthropic released new versions of its web search and web fetch tools. "Claude can now natively write and execute code during web searches to filter results before they reach the context window, improving its accuracy and token efficiency," it said. Anthropic on February 20 introduced changes to its Claude code to let customers preview running apps, auto-review code, auto-fix and merge PRs, and easily switch between desktop, mobile and CLI. "Together these updates help you spend less time on the toil around code and more time on the parts you enjoy," the AI startup said. As a result, the Nifty IT index fell more than 1.4% to close at 31,550.5 on February 23. The Indian IT stocks again crashed yesterday, February 24, tracking global peers. Shares of International Business Machines (IBM) plunged more than 13% on Monday, recording their steepest single-day drop in over 25 years. This came after AI startup Anthropic said its Claude Code tool could modernise a legacy programming language that runs on IBM systems. "Modernising a COBOL system once required armies of consultants spending ⁠years mapping workflows. Tools like Claude Code can automate the exploration and analysis phases ⁠that consume most of the effort in COBOL modernisation," Anthropic said in a blog post on Monday. The Nifty IT index tumbled nearly 5% to close at 30,053 on Tuesday. The IT stocks have recorded some gains on Wednesday, with Nifty IT closing 1.57% higher. However, the index is still down around 21% in one month. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)

Explained: How IBM share price's 13% plunge on Anthropic's COBOL disruption fears sparked bloodbath in TCS, Infosys, Wipro & other IT stocks

IBM Share Price and Anthropic AI Impact: IT stocks slumped on February 24, falling up to 8%, after IBM plunged 13% on Wall Street -- its worst drop in 25 years -- amid concerns that Anthropic's Claude AI tool could streamline COBOL code and disrupt IBM's legacy business. The weakness spilled over to Indian IT names. Shares of major information technology companies came under pressure on February 24, falling as much as 8%, after a sharp decline in IBM on Wall Street unsettled investors. The stock tumbled 13%, its worst single-day fall in 25 years, after AI startup Anthropic said that its Claude tool can help streamline COBOL code. COBOL, short for Common Business-Oriented Language, is widely used in business data processing and continues to power critical systems across banks, governments and airlines on IBM mainframes. The development raised concerns about potential disruption to IBM's core revenue streams, sending the stock to its worst single-day decline since October 2000. The sentiment spilled over into Indian IT stocks. Coforge, Persistent Systems and HCLTech led the losses with declines of about 7-8%. Shares of Infosys, Tech Mahindra, Mphasis and Tata Consultancy Services fell roughly 4-6%. The Nifty IT index tanked a staggering 6% on Tuesday. COBOL remains an important technology for many Indian IT firms, particularly those supporting global banking, insurance and retail infrastructure. TCS is among the largest employers for mainframe and COBOL-related roles in India, largely for international banking clients. Infosys also hires mainframe developers and system programmers for COBOL-based systems, while Wipro uses the language across several consulting and IT services engagements. Coforge similarly focuses on COBOL in parts of its specialised services portfolio. In a blog post on Monday, Anthropic said modernising COBOL systems traditionally required large teams of consultants spending years mapping workflows. "Tools like Claude Code can automate the exploration and analysis phases that consume most of the effort in COBOL modernization," the company said, adding that with AI, teams could modernise COBOL codebases in quarters rather than years. Anthropic claimed that AI excels at streamlining tasks that once made COBOL modernisation cost-prohibitive. "With it, your team can focus on strategy, risk assessment, and business logic while AI automates the code analysis and implementation," it said. The company claimed that the approach taken by AI can work for COBOL systems of any size. "Tools like Claude Code can automate much of the exploration and analysis work described, giving your team the comprehensive understanding they need to plan and execute migrations confidently," it said. Further, fresh concerns have also surfaced about AI's potential to reshape the cybersecurity industry. Tuesday's sharp decline in cybersecurity stocks reflected those fears, as investors assessed the possible impact of a new security tool launched by Anthropic. In today's session, several cybersecurity and technology stocks came under sharp selling pressure, with some falling as much as 20%. TAC Infosec was among the worst hit, hitting a 20% lower circuit at Rs 415.70 on the NSE. TechD Cybersecurity dropped more than 14%, while Sattrix Information Security declined 5%. Exato Technologies slipped 3%. Among other stocks, Sasken Technologies fell up to 3.2% to its day's low of Rs 1,155 per share on the BSE Limited. Quick Heal Technologies declined more than 3%, while Expleo Solutions dropped nearly 5% to its intraday low of Rs 791 per share. IBM shares sink 13%, record steepest drop in 25 years after Anthropic says AI can modernise COBOL (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Anthropic's 'misanthropic' moment for Indian IT! Claude parent's valuation tops the whole industry

Amid the rapid rise of artificial intelligence, AI firm Anthropic -- valued at about $380 billion -- has overtaken the combined market capitalisation of India's top IT companies, including TCS, Infosys, Wipro, HCL Technologies and Tech Mahindra, which together are worth around $240 billion. Amid the explosive rise of artificial intelligence and its increasing ability to automate large parts of the IT services business, Anthropic -- valued at around $380 billion -- has surged ahead, underscoring the scale of AI's disruption. The company's valuation now surpasses the combined market capitalisation of India's IT heavyweights such as Tata Consultancy Services, Infosys, Wipro, HCL Technologies and Tech Mahindra, which together are worth about $240 billion, and is even higher than the value of India's entire IT industry. What makes the story even more striking is the speed of its rise. Anthropic is just five years old, having been founded in 2021, yet it has already emerged as one of the most valuable players in the artificial intelligence race. In February 2026, the company raised $30 billion in its latest funding round, more than doubling the Claude chatbot maker's valuation to $380 billion and underscoring the enormous investor appetite for both the startup and the broader AI industry. Anthropic positions itself as an AI safety and research company focused on building reliable, interpretable and steerable AI systems. A key differentiator has been its strong emphasis on coding-focused models, with Claude Code gaining significant traction among developers and helping the company carve out an edge in the fast-growing enterprise AI market. The rapid progress of AI, and particularly Anthropic's latest tools, has rattled Indian technology stocks. The selloff has been severe, with the Nifty IT falling about 21% in February alone, marking its worst monthly decline since the 2008 global financial crisis. Pressure on IT shares had already been building earlier in the month after Anthropic unveiled a new AI product designed to automate a wide range of professional tasks, reigniting concerns that artificial intelligence could chip away at the profitability and long-standing competitive moats of traditional IT services companies. The company, which develops the Claude chatbot, said the product can automate several legal functions, including contract reviews, non-disclosure agreement triage, compliance workflows, legal brief preparation, and standardized responses. At the center of the market, nervousness is that AI could fundamentally reshape the competitive landscape for software and IT services firms, potentially weakening both profitability and market positioning. Industries once considered relatively insulated from AI disruption -- including legal services, data analytics, and customer support -- are now increasingly in focus. If AI is able to automate these functions, the large IT services industry built around delivering them could face significant challenges. Anthropic, backed by Google and Amazon, has rapidly expanded its revenue base, saying its current run-rate revenue has reached $14 billion. For Claude Code alone, the run-rate revenue has climbed to more than $2.5 billion, more than doubling since the beginning of 2026. Business subscriptions for Claude Code have quadrupled since the start of the year, with enterprise usage now accounting for over half of the product's total revenue, the company said. Anthropic has also stepped up its push into enterprise deals with offerings such as its Claude Cowork AI agent, designed to carry out computer-based tasks for white-collar workers. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)

Investors look for signs of bottom in software rout after Anthropic announcement

Software stocks have been pummeled in recent weeks, driven by fears their business models would be upended by AI tools, including those from Anthropic. Investors were looking anew for signs of a bottom in beleaguered shares of software companies on Tuesday after an announcement that artificial intelligence startup Anthropic was partnering with an array of companies. Investors were looking anew for signs of a bottom in beleaguered shares of software companies on Tuesday after an announcement that artificial intelligence startup Anthropic was partnering with an array of companies. Software stocks have been pummeled in recent weeks, driven by fears their business models would be upended by AI tools, including those from Anthropic. On Tuesday, Anthropic said it was developing new tools, the so-called "plug-ins", with its partners that ⁠could help ⁠with investment banking, wealth management and HR tasks. "We feel positive to see companies partnering with Anthropic, and we think that that might be the next chapter of this discussion," said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago. The announcement came several weeks after news that Anthropic launched plug-ins for its Claude Cowork agent set off severe selling in a range of software and other stocks. The software selloff marked a widening of AI-related fears that have haunted Wall Street in recent months, adding to concerns about pricey valuations and massive spending on data centers. Worries about circular spending between major AI players increased on Tuesday after Advanced Micro ⁠Devices said it would sell up to $60 billion worth of AI chips to Meta Platforms in a deal that allows the Facebook owner to buy as much as 10% of the chip firm's stock for a penny per share. Rebound for beaten down software stocks Some of Anthropic's partners including FactSet, Salesforce's Slack, and DocuSign rose following Tuesday's news. FactSet climbed about 6%, Salesforce rose 4%, DocuSign gained 2.6%. The S&P 500 software & services index rose 1.3%, although it remains down 23% in 2026, while the iShares Expanded Tech-Software Sector ETF added 1.9%. The software index touched a 10-month low on Monday after Citrini Research laid out a 2028 scenario where unemployment rises to 10.2%, triggered by layoffs as AI rapidly turfs out software and delivery applications. "Software stocks and the IGV particularly are just massively oversold. So any incremental news that we're getting about more disruptions is like getting to a point where how much is priced in already," said Dennis Dick, chief market strategist at Stock Trader Network. "Some of this disruption is not imminent and a lot of this is probably years out yet. The market's telling us that now." Kuby said his firm owns shares of LegalZoom, which announced a collaboration with Anthropic on Tuesday. LegalZoom shares rose ⁠2.6% on Tuesday but were still down over 30% on the year. "The conversation might change from disruption to what are the use cases, how does this benefit your business," Kuby said. "It's been such a one-sided conversation on the disruption side." A week-long selloff earlier this month wiped out about $1 trillion in market value on Wall Street that analysts dubbed 'Software-mageddon' and hurt sectors spanning from software to logistics companies on both sides of the Atlantic and India. And risks could remain. Just on Monday, Anthropic said its Claude Code tool could be used to modernize a programming language run on IBM systems, resulting in the biggest daily drop in shares of the legacy company in more than 25 years. IBM shares were up 2.7% on Tuesday.

Markets tumble with IT shares hit by renewed anxiety over AI impact

Mumbai: AI company Anthropic sparked another wave of panic selling in IT stocks, the second in three weeks, this time with a blog post. Mounting anxiety over the outlook for India's billion-dollar software services sector dragged benchmark indices down. The NSE Nifty fell 288.35 points, or 1.1%, to close at 25,424.65. The BSE Sensex fell 1,068.74 points, or 1.3%, to end at 82,225.92. The Nifty IT index plunged 4.7% to the lowest close since August 2023, tracking the stampede out of US software stocks overnight as investors continued to fret over the AI impact on the industry. IBM tumbled 13% on Monday night, its biggest one-day decline since 2000, after Anthropic said its AI tool Claude Code could streamline programming language COBOL, signalling AI's ability to automate legacy-system maintenance. "Modernising a COBOL system once required armies of consultants spending years mapping workflows," Anthropic said in the post. Further Downside Seen "Tools like Claude Code can automate the exploration and analysis phases that consume most of the effort in COBOL modernisation. With AI, teams can modernise their COBOL codebase in quarters instead of years,." Anthropic said in the post. Globe Capital Market head of research Gaurav Sharma said, "The ongoing IT sell-off, driven by concerns around AI, continues to weigh heavily on market sentiment, and we believe the space could see further downside." Sharma said the breakdown in the Nifty IT index shows no signs of stabilising, with the potential to test the 27,500 level, against Tuesday's close of 30,053.50, implying an additional 5-10% correction in large-cap IT names. Since February 3, when Anthropic announced AI tool Claude Cowork and pushed investors to flee the sector, the IT index is now down more than 21% over the past month, and about 22% since the announcement. Broader markets resilient The broader markets were relatively resilient. The Nifty Midcap 150 fell 0.3%, while the Nifty Smallcap 250 declined 0.6%. Of the total 4,367 stocks traded on the BSE, 1,344 advanced and 2,889 declined at close. Elsewhere in Asia, Japan and China rose about 0.9% each. South Korea gained 2.1% and Taiwan climbed 2.8%. Hong Kong fell 1.8%. The pan-European Stoxx 600 index was flat at the time of going to print. Back home, foreign portfolio investors (FPIs) net sold shares worth Rs 103 crore, while domestic institutional investors were buyers to the tune of Rs 3,161 crore. Weaker global cues, particularly due to rising geopolitical tensions, have also added to uncertainty, with the prospect of a US-Iran conflict looming. "Any escalation in tensions between the US and Iran could reignite concerns across the Gulf region," said Sharma. "Early signs are visible in crude oil and precious metal prices, and a sustained rise in crude as well as gold and silver could trigger more weakness in equities." Brent crude May futures continued to hover above the $71 level, showing no signs of cooling off. Gold and silver prices saw a minor dip of nearly 1% each but remained above levels seen a week ago. Technical indicators are pointing to further weakness in Indian equities. Mehul Kothari, DVP, technical research, Anand Rathi Share and Stock Brokers said after Tuesday's sharp decline, the Nifty broke below its previous swing low near 25,370. VIX down 0.1% The Nifty's India Volatility Index, or VIX-widely used as a gauge of market fear-fell marginally by 0.1% to 14.15, suggesting options traders see lower chances of a sharper fall. The index has gained 13.5% over the past five sessions. Kothari said the 25,400-25,300 zone is likely to act as a key support for the Nifty in the coming sessions. "If this level holds, the market may attempt to stabilise. On the upside, 25,600 will remain a strong resistance level, and a decisive move above it is required for bulls to regain control," he said.

Investors look for signs of bottom in software rout after Anthropic announcement

Feb 24 (Reuters) - Investors were looking anew for signs of a bottom in beleaguered shares of software companies on Tuesday after an announcement that artificial intelligence startup Anthropic was partnering with an array of companies. Software stocks have been pummeled in recent weeks, driven by fears their business models would be upended by AI tools, including those from Anthropic. On Tuesday, Anthropic said it was developing new tools, the so-called "plug-ins", with its partners that could help with investment banking, wealth management and HR tasks. "We feel positive to see companies partnering with Anthropic, and we think that that might be the next chapter of this discussion," said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago. The announcement came several weeks after news that Anthropic launched plug-ins for its Claude Cowork agent set off severe selling in a range of software and other stocks. The software selloff marked a widening of AI-related fears that have haunted Wall Street in recent months, adding to concerns about pricey valuations and massive spending on data centers. Worries about circular spending between major AI players increased on Tuesday after Advanced Micro Devices said it would sell up to $60 billion worth of AI chips to Meta Platforms in a deal that allows the Facebook owner to buy as much as 10% of the chip firm's stock for a penny per share. REBOUND FOR BEATEN DOWN SOFTWARE STOCKS Some of Anthropic's partners including FactSet, Salesforce's Slack, and DocuSign rose following Tuesday's news. FactSet climbed about 6%, Salesforce rose 4%, DocuSign gained 2.6%. The S&P 500 software & services index rose 1.3%, although it remains down 23% in 2026, while the iShares Expanded Tech-Software Sector ETF added 1.9%. The software index touched a 10-month low on Monday after Citrini Research laid out a 2028 scenario where unemployment rises to 10.2%, triggered by layoffs as AI rapidly turfs out software and delivery applications. "Software stocks and the IGV particularly are just massively oversold. So any incremental news that we're getting about more disruptions is like getting to a point where how much is priced in already," said Dennis Dick, chief market strategist at Stock Trader Network. "Some of this disruption is not imminent and a lot of this is probably years out yet. The market's telling us that now." Kuby said his firm owns shares of LegalZoom, which announced a collaboration with Anthropic on Tuesday. LegalZoom shares rose 2.6% on Tuesday but were still down over 30% on the year. "The conversation might change from disruption to what are the use cases, how does this benefit your business," Kuby said. "It's been such a one-sided conversation on the disruption side." A week-long selloff earlier this month wiped out about $1 trillion in market value on Wall Street that analysts dubbed 'Software-mageddon' and hurt sectors spanning from software to logistics companies on both sides of the Atlantic and India. And risks could remain. Just on Monday, Anthropic said its Claude Code tool could be used to modernize a programming language run on IBM systems, resulting in the biggest daily drop in shares of the legacy company in more than 25 years. IBM shares were up 2.7% on Tuesday. (Reporting by Johann M Cherian, Sruthi Shankar and Purvi Agarwal in Bengaluru, Lewis Krauskopf in New York; Editing by Shinjini Ganguli and Lincoln Feast)

US software stocks climb as Anthropic announcement sparks relief rally

Feb 24 (Reuters) - Shares of U.S. software companies that entered into partnerships with AI startup Anthropic on Tuesday helped lead a rebound in the sector that has been hammered by fears about the disruptive impact of artificial intelligence. Anthropic said it was developing new tools, the so-called "plug-ins", with its partners that could help with investment banking, wealth management and HR tasks, including deal reviews, portfolio analysis and making new-hire materials reflect a brand's tone and policies. Shares of its partners, including LSEG, FactSet, Salesforce's Slack, and DocuSign, climbed between 0.4% and 5.3%. The S&P 500 software & services index also rose 1.4% and the iShares Expanded Tech-Software Sector ETF jumped 2.4%. The software index touched a 10-month low on Monday after Citrini Research laid out a 2028 scenario where unemployment rises to 10.2%, triggered by layoffs as AI rapidly turfs out software and delivery applications. "Software stocks and the IGV particularly are just massively oversold. So any incremental news that we're getting about more disruptions is like getting to a point where how much is priced in already," said Dennis Dick, chief market strategist at Stock Trader Network. "Some of this disruption is not imminent and a lot of this is probably years out yet. The market's telling us that now." A week-long selloff earlier this month wiped out about $1 trillion in market value on Wall Street that analysts dubbed 'Software-mageddon' and hurt sectors spanning from software to logistics companies on both sides of the Atlantic and India. Anthropic said on Monday its Claude Code tool could be used to modernize a programming language run on IBM systems, resulting in the biggest daily drop in shares of the legacy company in more than 25 years. IBM shares were up 3.5% on Tuesday. Tax-preparation software Intuit gained 2.8% and AI-solutions provider Intapp climbed 7.1% after the companies announced separate partnerships with Anthropic on Tuesday. (Reporting by Johann M Cherian, Sruthi Shankar and Purvi Agarwal in Bengaluru; Editing by Shinjini Ganguli)

US software stocks climb as Anthropic announcement sparks relief rally

Software stocks saw a strong rebound on Tuesday. This followed news of new AI tools developed by Anthropic with its partners. These tools aim to assist in areas like investment banking and HR. Shares of companies like LSEG, FactSet, Salesforce's Slack, and DocuSign saw gains. This positive movement comes after recent fears about AI's impact on the sector. Shares of U.S. software companies that entered into partnerships with AI startup Anthropic on Tuesday helped lead a rebound in the sector that has been hammered by fears about the disruptive impact of artificial intelligence. Anthropic said it was developing new tools, the so-called "plug-ins", with its partners that could help with investment banking, wealth management and HR ⁠tasks, ⁠including deal reviews, portfolio analysis and making new-hire materials reflect a brand's tone and policies. Shares of its partners, including LSEG, FactSet , Salesforce's Slack, and DocuSign, climbed between 0.4% and 5.3%. The S&P 500 software & services index also rose 1.4% and the iShares Expanded Tech-Software Sector ETF jumped 2.4%. The software index touched a 10-month low on Monday after Citrini Research laid out a 2028 ⁠scenario where unemployment rises to 10.2%, triggered by layoffs as AI rapidly turfs out software and delivery applications. "Software stocks and the IGV ⁠particularly are just massively oversold. So any incremental news that we're getting about more disruptions is like getting to a point where how much is priced in already," said Dennis Dick, chief market strategist at Stock Trader Network. "Some of this disruption is not imminent and a lot of this is probably years out yet. The market's telling us that now." A week-long selloff earlier this month wiped out about $1 trillion in market value on Wall Street that analysts dubbed 'Software-mageddon' and hurt sectors spanning from software to logistics companies on both sides of ⁠the Atlantic and India. Anthropic said on Monday its Claude Code tool could be used to modernize a programming language run on IBM systems, resulting in the biggest daily drop in shares of the legacy company in more than 25 years. IBM shares were up 3.5% on Tuesday. Tax-preparation software Intuit gained 2.8% and AI-solutions provider Intapp climbed 7.1% after the companies announced separate partnerships with Anthropic on Tuesday. (You can now subscribe to our ETMarkets WhatsApp channel)

Analysts' comments after Anthropic unveils new plug-ins

Feb 24 (Reuters) - Artificial intelligence lab Anthropic on Tuesday unveiled 10 new ways for business customers to plug in its technology to key areas of their work, weeks after other releases sparked an aggressive selloff of traditional software company shares. The San Francisco-based startup said its plug-ins could now help with investment banking tasks, such as reviewing deals, wealth-management tasks like portfolio analysis and human resource-related tasks, such as making new-hire materials reflect a brand's tone and policies. MARKET REACTION: The S&P 500 index was up 0.6%, while Nasdaq rose 1%, boosted by technology shares. Salesforce advanced 3.4%, making it one of the biggest gainers on the blue-chip Dow. The S&P 500 software and services index climbed 0.5%, recovering some losses. It has lost 23.5% so far this year, as the sector grapples with AI-disruption fears. COMMENTS: ROBERT PAVLIK, SENIOR PORTFOLIO MANAGER, DAKOTA WEALTH, FAIRFIELD, CONNECTICUT: "Anthropic's been busy with announcements that their product is going to do all these new and sort of wonderful things. It's still early in the process and certainly acceptance and the application of these tools is probably still a ways away. I can see how parts of these products would be welcomed by corporations trying to reduce overhead and costs, if they work. "But we know from experience that you definitely need human intervention, otherwise problems develop. I don't think that people anticipate AI will taking over for real humans and real tasks. Regarding labor market disruption: "I think it's still too early to tell. I don't think adaptation or implementation of these AI products is that fully done yet. We're still a ways away from it being fully implemented in the actual workforce." KEN POLCARI, PARTNER AND CHIEF MARKET STRATEGIST AT SLATESTONE WEALTH IN JUPITER, FLORIDA: "Investment banking - that got hit a couple of weeks ago when they did the legal and financial services, so that was a known. Yesterday's reaction was so overdone that it can't help but bounce a little bit. I don't think it's going to hold. I think it's going to continue to weaken a little bit. The opening is just a reflection of the disaster that took place yesterday. I think it probably settles in and then trades lower again. Not like yesterday, but I think it churns lower. "There's some people getting fatigued. I also think there are some names that have gotten absolutely clobbered that are actually looking like opportunities. Even though they're down, and even though it's an AI story, and even though it's blah, blah, blah, everyone's talking negative, it does create an opportunity where there's some value in these stocks that have gotten crushed. "Some of it is that 'shoot first, ask questions later' mentality all driven by algorithms. And then like anything, the pendulum swings too far to the left and it swings too far to the right. "I'm not saying that AI is not going to disrupt the world. It clearly is. And it will continue to disrupt the world, but I don't think it's the end of the world. Like every industrial revolution, there'll be anxiety going through it, but then when it comes out the other side, there will be new opportunities. We don't know yet what they are. Some opportunities, they won't exist anymore. "I'm not in that camp that's lighting my hair on fire. I'm in a camp that as long as you remain relevant and change with it and keep yourself up to date and educated, then you just kind of move along."

Wall St muted after Anthropic announces new AI tools

Feb 24 (Reuters) - Wall Street's main indexes were subdued on Tuesday as investors assessed Anthropic's announcement of new AI tools, including plug-ins that could help with investment banking tasks, private equity, engineering and design. Anthropic unveiled 10 new ways for business customers to plug in its technology to key areas of their work, weeks after other releases sparked an aggressive selloff of traditional software company shares. At 09:31 a.m. ET, the Dow Jones Industrial Average fell 7.93 points, or 0.01%, to 48,789.46, the S&P 500 lost 4.18 points, or 0.06%, to 6,832.89 and the Nasdaq Composite gained 2.66 points, or 0.02%, to 22,635.01. (Reporting by Shashwat Chauhan in Bengaluru; Editing by Pooja Desai)