AI Fears Keep Hammering Software Stocks—Even Those Reporting Good Earnings

BreakingInnovationAI Fears Keep Hammering Software Stocks—Even Those Reporting Good EarningsByAlicia Park,Fellow. I cover tech and innovation.Follow AuthorApr 23, 2026, 02:54pm EDTApr 23, 2026, 03:03pm EDT--:-- / --:--This voice experience is generated by AI. Learn more.This voice experience is generated by AI. Learn more.ToplineSoftware companies IBM and ServiceNow both beat Wall Street's estimates in first quarter earnings Wednesday after market close, but both stocks plummeted—leading a broader selloff across software companies Thursday as fears about AI disruption persist. Software stocks have plunged this year. gettyKey FactsServiceNow tumbled 18% Thursday, after reporting first quarter revenue of $3.77 billion—up 22% year-over-year and topping the $3.75 billion estimate—and adjusted earnings of 97 cents per share versus 96 cents expected. ServiceNow, which sells IT and management software to companies, also said ongoing tensions in the Middle East delayed some deals with government clients, contributing to the stock declineIBM shares fell more than 9% Thursday after the company posted first-quarter revenue of $15.92 billion—up 9.5% year-over-year and topping the $15.71 billion consensus estimates—and adjusted earnings of $1.91 versus the $1.81 estimate.Thursday's losses are piling onto a historically rough year, with ServiceNow down more than 40% this year and IBM down 21%. The selloff rippled across the sector Thursday, with stocks including Salesforce, Atlassian and Workday all down roughly 10%, as well as Adobe and Salesforce down 8%.iShares’ Expanded Tech-Software Sector ETF, which includes more than 100 software stocks, is down 6% Thursday and has plunged 27% in the last six months as fears about AI replacing software applications have mounted. In contrast, semiconductor manufacturer Texas Instruments stock jumped 17% Thursday after beating earnings expectations—in line with soaring investor enthusiasm for AI-related hardware stocks including ch...