JPMorgan analysts recommend reducing software stock exposure through 2026, signaling a fundamental market shift toward cyclical sectors. The rotation reflects valuation concerns, growth deceleration, and changing investor priorities as technology's decade-long dominance faces unprecedented headwinds in a higher-rate environment.
Software stocks are tumbling as investors confront whether artificial intelligence represents an existential threat to traditional business models. The sector faces margin compression, business model disruption, and uncertainty about whether incumbents can successfully transition to AI-powered services.
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