While the Dow Jones Industrial Average (NYSEARCA:DIA) has climbed 3.4% year-to-date entering Thursday's trading, three blue-chip giants went the opposite direction. Salesforce (NYSE:CRM), Microsoft (NASDAQ:MSFT | MSFT Price Prediction), and UnitedHealth Group (NYSE:UNH) became the index's biggest drags, each shedding double-digit percentages while the broader market marched higher. Beating earnings doesn't guarantee stock gains when investors question the path forward.
Michael Lewis and Tom Lee held court in a podcast taping in New York City on Tuesday, talking to SoFi's head of investment research Liz Thomas for her show The Important Part. In a wide-ranging conversation that covered, among other things, Lee's thoughts on flash-frozen technology and Michael Lewis' dinner with OpenAI CEO Sam Altman on the subject of Sam Bankman-Fried, the two towering figures in finance debated whether the current sell-off in software stocks was turning into something more serious.
For one, there's the sheer speed and breadth of it. In the span of two days, hundreds of billions of dollars were wiped off the value of stocks, bonds and loans of companies big and small across Silicon Valley. Software stocks were at the epicenter, plunging so much that the value of those tracked in an iShares ETF has now dropped almost $1 trillion over the past seven days.
Oracle's cofounder and tech chief was worth $199 billion at Wednesday's close, down from $247 billion at the start of January, per the Bloomberg Billionaires Index. A 5% slump in Oracle stock on Wednesday erased about $9 billion from his fortune. Investors have been offloading software stocks following Anthropic's release last week of plugins for its Claude Cowork AI agent, designed to automate legal, sales, finance, marketing, and data analysis tasks for corporations.
It was a nasty year for the software stocks in 2025, as investors pondered the disruptive impact of artificial intelligence (AI). With shares of enterprise software and AI agent innovator Salesforce ( NYSE:CRM) and creative software titan Adobe ( NASDAQ:ADBE) starting off the very first trading day of the year with a steep decline, it feels like all hope is lost for 2026, as the ailing software plays come in limping to kick off 2026.
