Software Stocks Plunge as Amazon Web Services and Anthropic Accelerate AI Automation Push

Software Stocks Drop on Report Amazon Is Developing New AI Tools

Software stocks dropped on Tuesday after a report on new AI tools from Amazon.com Inc. rekindled the disruption fears that have roiled the sector in the past few months. Amazon's cloud-computing arm, Amazon Web Services, is developing an AI agent to automate some of functions for sales, business development and other groups that have been targeted in the tech giant's sweeping job cuts, the Information reportedBloomberg Terminal, citing people familiar with the matter. The agent being developed by AWS handles some of the workload of thousands of technical specialists in areas like cybersecurity and server networking, according to the report. An exchange-traded fund tracking software stocks fell as much as 4.4%, the biggest drop in a month. UiPath Inc. and HubSpot Inc., were among the biggest decliners, falling more than 9%. Trello-owner Atlassian Corp. fell as much as 9.5%. Software stocks have been pummeled this year as new releases of AI tools from startups, including Anthropic, have raised concerns about the outlook for growth of software incumbents. The iShares Expanded Tech-Software Sector ETF is on pace for its worst quarter since 2008 with a drop of 23% since the end of 2025. Late on Monday, Anthropic said its Claude chatbot can now take over a user's computer to complete tasks such as navigating a browser and filling in spreadsheets. Adding to the anxiety, Ares Management Corp. and Apollo Global Management Inc. are limiting withdrawals from private credit funds as concerns about loans to software makers and other companies seen as vulnerable to AI have driven a wave of redemption requests.

Software stocks under pressure as Anthropic and AWS double down on AI automation By Investing.com

Investing.com -- Microsoft Corporation (NASDAQ:MSFT) fell 2.6% Tuesday as the broader software sector came under pressure. The iShares Expanded Tech-Software Sector ETF dropped 4%, with Palantir Technologies and Salesforce, the second and third largest holdings in the ETF, declining 5%. The weakness was attributed to developments in AI automation that could disrupt traditional software business models. Anthropic announced Tuesday that its Claude AI assistant can now control computers to complete tasks, including opening apps, navigating browsers, and filling spreadsheets. The feature, available in Claude Cowork and Claude Code for macOS users, allows the AI to operate directly on users' screens when no app connector exists. The capability enables users to assign tasks from mobile devices and return to completed work on their computers. Users can also schedule recurring tasks, such as scanning email every morning or generating weekly reports. The feature is available to Pro and Max subscribers. Separately, The Information reported that Amazon Web Services is developing AI agents to automate functions in sales, business development, and other groups where it recently laid off hundreds of employees. AWS has been building an AI agent that helps sales employees answer technical questions, handling work previously performed by thousands of technical specialists in areas like cybersecurity and server networking. An AWS spokesperson confirmed the company is developing an agent that "aggregates specialist knowledge from across AWS," enabling employees to "focus on the most complex, high-value customer challenges." The developments highlight growing concerns about AI automation's potential impact on traditional software and services businesses, contributing to Tuesday's sector-wide decline.