AI Fears Send Software Stocks Lower, Tightening Grip on Bitcoin

Software stocks slid sharply this month as investors weighed the disruptive potential of artificial intelligence. The iShares Expanded Tech-Software Sector ETF (IGV) fell about 15% in February, testing its April 2025 lows and sitting roughly 35% below its peak — on pace for its worst monthly performance since 2008.

The downturn accelerated after Anthropic introduced Claude Code Security, a tool that scans codebases for vulnerabilities and suggests patches. The announcement triggered heavy losses across cybersecurity names: CrowdStrike erased about $20 billion of market value across two trading sessions and IBM shares fell more than 10%.

Over $52.6 billion was wiped out in two days, with Palo Alto Networks down roughly 8.9% and other cyber firms also suffering steep declines. Holger Zschaepitz noted that cybersecurity stocks were particularly hard hit and that even software names thought to be AI‑immune faced heavy pressure.

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