The technology sector in the United States is going through what analysts have dubbed “Software-mageddon”. In the last 48 hours, a wave of massive selling has swept Wall Street exchanges, resulting in the loss of more than 800 billion dollars (around 745 billion euros) in market value in the S&P 500 Software and Services index alone.
According to data from Reuters and Bitget, This event marks the most severe correction in the software North American since the dot-com collapse in 2002, raising urgent questions about the sustainability of the current “AI bubble.”
The end of patience on Wall Street
The trigger for this capitulation in New York is the transition from the promise phase to the proof phase. According to Nasdaq reports published on February 4, investors began to severely punish companies that, despite investing billions in Artificial Intelligence, are still unable to demonstrate a clear return.
The case of Alphabet (Google) served as a warning sign: although the company presented solid revenues, the market reacted negatively to the astronomical increase in its investment in infrastructure (Capex), which could reach 185 billion dollars (172 billion euros) in 2026. As InvestmentNews reported, this “AI bill” is raising fears that computing costs could eat into profit margins before real monetization happens.
The “death of SaaS”
“Software-mageddon” is being particularly cruel to the traditional Software as a Service (SaaS) that dominated Silicon Valley in the last decade. ServiceNow saw its shares plummet 11% in a single day, accumulating a loss of almost 50% in the last year. According to an analysis by Salesforce Ben, The market fears that AI-driven automation will make obsolete the workflows that companies like ServiceNow and Salesforce (which also hit 52-week lows in New York) helped create.
The threat of direct disruption became palpable with the case of Thomson Reuters. The company suffered a record decline after Anthropic, a leading startups of US AI, announce a new plug-in of its Claude model focused on automatically carrying out complex legal tasks, precisely the main business of that information giant. This event illustrates investors’ biggest fear: that more advanced AI models will be able to completely replace specialized and expensive software tools.
Microsoft: giant on the “tightrope”
At the center of this storm is also Microsoft. Considered the “face” of the AI revolution due to its partnership with OpenAI, the Redmond giant became the worst performer among the so-called “Magnificent Seven” at the beginning of 2026. As analyst Dan Ives, from Wedbush Securities, points out, Microsoft now faces the “execution gap”: the market demands to see profits that justify the colossal expenses.
The company has channeled amounts in excess of 100 billion dollars (around 93 billion euros) into data centers and chips. However, reports from Bloomberg indicate that enterprise adoption of Microsoft 365 Copilot is being slower than anticipated, with customers questioning the $30 per user cost. This discrepancy between investment and real income is one of the main drivers of skepticism on Wall Street.
Not everyone loses: the Palantir exception
Amid the chaos, signs are emerging that the bubble may just be singling out the true utilities in the U.S. market. Palantir Technologies stood out with a 7% rise following its February 3 results. Dan Ives, from Wedbush Securities, said in a note to clients that this company is managing to prove that its AIP platform is already being adopted on an industrial and government scale, with a 73% growth in its customer base in the United States.
Adverse macroeconomic context
The technology crisis on Wall Street is amplified by geopolitical tensions that indicate a flight from risky assets. This was even reflected in cryptocurrencies, with Bitcoin falling to the level of 71,000 dollars (around 66,000 euros) after chain liquidations.
Simultaneously, legendary investor Jeremy Grantham, cited by Firstlinks, reiterated his warning that AI in the US bears all the contours of a “classic bubble”, where stretched valuations leave little room for any execution error on the part of the Federal Reserve (Fed) or the companies themselves.
This “Software-mageddon” of 2026 may be remembered as the moment when Artificial Intelligence stops being a “growth story” and becomes a survival metric for North American corporations.
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