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Software stocks dragged the technology sector lower on Tuesday.
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Nvidia CEO Jensen Huang says concerns about AI disruption are “illogical.”
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The software-led rout signals a shift in the market toward other areas that have lagged recently.
Technology stocks continued to fluctuate on Wednesday as Wall Street worried that artificial intelligence would replace software, a view Nvidia CEO Jensen Huang dismissed this week as “illogical.”
The tech-heavy Nasdaq Composite and S&P 500 both extended losses since Tuesday’s session. The software sector led the tech selloff, with the iShares Expanded Tech-Software Sector ETF down nearly 4% and down 22% year to date.
But Wall Street’s concerns about further disruption from artificial intelligence were brushed aside on Tuesday by one of the field’s icons. Nvidia CEO Jensen Huang addressed the latest unease at a Cisco AI event.
“There’s this idea that the tools industry is in decline and will be replaced by AI. You can see that because there’s a whole bunch of software companies that have a lot of pressure on their stock prices because AI is going to replace them in some way. It’s the most illogical thing in the world and time will tell itself.”
Huang outlined his view that software is a tool that AI uses, not a replacement for it, explaining that AI will use the tools provided by software rather than reinventing its own tools.
The CEO singled out Service Now, SAP, Cadence and Synopsis as highlights in the field.
The recent weakness in the software sector comes amid a broad market shift toward technology stocks. The iShares Expanded Tech-Software Sector ETF has fallen nearly 20% over the past year, and the sector fell into a bear market last week.
Here are some of the stocks that dragged the iShares Expanded Tech-Software Sector ETF lower during Wednesday’s trading session:
Read the original article on Business Insider
