The brutal wipeout in software stocks is getting even worse, in 3 charts

Software stocks slid further this week after new tools from Anthropic sparked a sharp sell-off, with legal software names hit particularly hard and the broader sector weakening over two sessions. The iShares Expanded Tech-Software Sector ETF fell again on Wednesday as selling pressure continued after Tuesday's rout.

The sector officially entered a bear market last week. The iShares ETF is roughly 27% below its September 2025 peak, and the price-to-earnings ratio in the S&P software index has dropped from around 85x last summer to below 60x. Some of the worst performers from recent highs include Oracle, Varonis, CommVault, and Circle, each down more than 50% from their September peaks.

Individual names that fell sharply in recent sessions included AppLovin, Palantir, Oracle, and ServiceNow.

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