(Bloomberg) — Software stocks dropped on Tuesday after a report on new AI tools from Amazon.com Inc. rekindled the disruption fears that have roiled the sector in the past few months.
Amazon’s cloud-computing arm, Amazon Web Services, is developing an AI agent to automate some of functions for sales, business development and other groups that have been targeted in the tech giant’s sweeping job cuts, the Information reported, citing people familiar with the matter. The agent being developed by AWS handles some of the workload of thousands of technical specialists in areas like cybersecurity and server networking, according to the report.
An exchange-traded fund tracking software stocks fell 4.3%, the biggest drop in a month. UiPath Inc. and HubSpot Inc., were among the biggest decliners, both falling about 9%. Trello-owner Atlassian Corp. fell 8.4%.
Software stocks have been pummeled this year as new releases of AI tools from startups, including Anthropic, have raised concerns about the outlook for growth of software incumbents. The iShares Expanded Tech-Software Sector ETF is on pace for its worst quarter since 2008 with a drop of more than 23% since the end of 2025.
Late on Monday, Anthropic said its Claude chatbot can now take over a user’s computer to complete tasks such as navigating a browser and filling in spreadsheets.
Adding to the anxiety, Ares Management Corp. and Apollo Global Management Inc. are limiting withdrawals from private credit funds as concerns about loans to software makers and other companies seen as vulnerable to AI have driven a wave of redemption requests.
–With assistance from Ryan Vlastelica.
(Updates to market close.)
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