The long-standing dominance of software stocks on Wall Street is facing a challenge as artificial intelligence shifts investor priorities. Software giants like Salesforce, Adobe, and ServiceNow are struggling this year, shedding billions in market value as investors shift funds to companies actively investing in AI. 2023 has seen tech’s most prominent players like Microsoft, Oracle, and Palantir lead the S&P 500 performance, while companies like Meta capitalize on AI-powered ad targeting and user engagement, driving growth. Meanwhile, cybersecurity companies such as CrowdStrike have thrived despite the advancements in AI due to their core offerings’ resilience against its disruptive effects. This trend is not limited to the US; European software giants like SAP are also seeing a decline following Monday.com’s warning on its future prospects. The rise of AI has forced companies like Salesforce, Adobe and ServiceNow to adapt, prompting investors to question their long-held positions in the software space. This shift has brought valuations down considerably for software stocks. While some believe this downturn offers potential investment opportunities, many remain cautious given the rapid changes in the industry. For example, UBS strategists suggest exploring internet and software companies that haven’t been as heavily impacted by AI advancements, while acknowledging its growing influence on the sector’s future.