CNBC·2026-01-29 15:18Industry Overview - Software stocks are experiencing a significant sell-off, with the iShares Expanded Tech-Software Sector ETF (IGV) dropping approximately 5% in morning trading, marking its largest one-day decline since last April [2] - The ETF is now down about 21% from its recent high, indicating that the software industry has entered bear-market territory [2] Company Performance - ServiceNow reported fourth-quarter earnings that exceeded Wall Street expectations, yet its shares fell more than 11% on the day of the announcement [2] - Analysts from Morgan Stanley commented that while ServiceNow's performance was good, it was not sufficient to change the negative narrative surrounding incumbent application vendors [3] Market Sentiment - Investor concerns regarding the potential impact of artificial intelligence on traditional software business models are overshadowing positive earnings reports [3] - The sell-off has also affected major tech companies, with Microsoft experiencing a 10% decline after reporting a slowdown in cloud growth and providing softer-than-expected guidance for operating margins [4]