Software Selloff vs. Walmart $1T: Start of the âSoftware Death Loopâ?
@Tiger_commentsïŒ
Software Stocks Crash as Walmart Hits $1 Trillion! Is this the biggest market shift of 2025? The market is showing a brutal split right now: Software stocks are getting crushed. While $Wal-Mart(WMT)$ just crossed a $1 trillion market cap, up ~14% YTD â outperforming Apple, Microsoft, and Amazon 1) What happened: software names got hit hard One of the biggest triggers behind this selloff is the market repricing how fast AI could disrupt parts of the software stack. After new developments around Anthropicâs Claude (and the broader narrative that AI tools can increasingly replace knowledge-work workflows), investors started questioning: How much of âsoftware valueâ is truly defensible anymore? Damage report (single day): ~$285B market cap wiped out Some notable moves: $AppLovin Corporation(APP)$ down ~14% $Unity Software Inc.(U)$ & $Palantir Technologies Inc.(PLTR)$ -5%, and 10% The market fear is simple: If AI can do parts of what software does, then whatâs the moat? 2) Jensen Huangâs response: AI wonât replace software NVIDIA CEO Jensen Huang pushed back on the most extreme version of the narrative, calling the âAI replaces softwareâ idea illogical. His point is practical: AI is more like an efficiency layer, not a full replacement. You donât rebuild Excel from scratch just because AI exists. But the key is: Only the strongest software categories will survive as âmust-haves.â 3) Why Walmart is winning: physical assets + AI = real operational leverage So why is Walmart suddenly the winner in this narrative? Not because itâs an âAI companyâ â but because it owns what AI canât replace: physical assets, supply chain scale, and logistics networks. Some market highlights being discussed: ~60% of warehouses automated with AI ~90% of restocking AI-driven Partnerships with Google & OpenAI Conversion rates reportedly up ~22% 4) âSoftware death loopâ: JPMorgan views BDCs are becoming the credit risk hotspot. This selloff becomes more dangerous when it shifts from equity panic to a broader credit stress narrative. JPMorganâs take is that the selloff in software â and other industries perceived to be exposed to AI disruption â has shown little sign of easing. More importantly, JPMorgan warns the risk is increasingly migrating from stocks into credit markets, with Business Development Companies (BDCs) turning into a key pressure point. According to JPMorgan, BDCs hold roughly: $70B in software-related loans, around 16% of their total portfolios After the sharp software drawdown, these loan-linked assets may become mispriced or âdislocated.â 5) If the paradigm is shifting⊠how to position? Discussion: whatâs your take? đ So whatâs really happening here? Is this just a short-term panic⊠or a real regime shift? Do you think this is: A) the beginning of the end for software stocks, or B) an overreaction that creates a buying opportunity? Leave your comments to win tiger coins!
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