'This probably seems overdone': Wall Street strategists weigh in on software stock sell-off

Group 1: Market Overview - A significant sell-off in the software sector occurred over the past week, particularly on Tuesday, Wednesday, and Thursday, as investors reacted to aggressive disruptions from AI advancements [1][2] - Despite a rebound on Friday, the tech-heavy Nasdaq experienced a weekly decline of over 2%, with major software companies like Salesforce and ServiceNow seeing their shares drop more than 9% [2] - Strategists are urging patience, suggesting that the recent market moves may have overshot the potential risks facing the software industry [2][3] Group 2: Company Performance - Notable declines in software stocks year-to-date include Oracle (-26.7%), Salesforce (-27.8%), and ServiceNow (-34.2%), among others [5] - Earnings reports from major tech companies revealed that capital expenditures related to AI from Amazon, Alphabet, Meta, and Microsoft are projected to exceed $650 billion [6] Group 3: Strategic Insights - Invesco's chief global market strategist indicated that the market's reaction may be overdone, with some software names significantly impacted [3] - JonesTrading's chief market strategist noted that larger software companies capable of adapting to AI advancements are likely to be fine, although new risks are emerging [4] - There is a shift in investor sentiment, with a more discerning approach to valuing companies as the industry transitions from capital-light to potentially more capital-intensive operations [7]