Software Stocks Enter Bear Market on AI Disruption Fears as SAP and ServiceNow Disappoint

Summary

On January 29, 2026, software stocks suffered their worst single-day decline since the Covid crash, pushing the iShares Expanded Tech-Software Sector ETF down approximately 22% from its recent high and officially into bear-market territory. The selloff was triggered by a combination of disappointing earnings guidance from SAP and ServiceNow, compounded by deepening investor fears that AI could fundamentally disrupt traditional SaaS business models. SAP plunged more than 16%, shedding approximat