Despite Nvidia CEO Jensen Huang's optimism, the AI-driven software stock rout may continue. The market is skeptical about the long-term value of established software companies like Salesforce and Workday due to rapid AI advancements. Recent developments, such as Anthropic's new AI tools, have intensified these concerns, leading to further sell-offs across the sector.

Anthropic's new plug-ins are designed to automate tasks, potentially disrupting existing business models. Shares of companies such as Thomson Reuters and PayPal have already experienced double-digit percentage drops. The US Software index has declined for six consecutive sessions, reflecting a shift from AI euphoria to worries about disruption and the potential obsolescence of existing software.

Deutsche Bank strategists note a growing market differentiation and apprehension of AI's impact on business models. The rise of model builders like Anthropic, and their focus on creating tools, is a major threat to legacy software firms. Software is under pressure because new AI releases are perceived as disruptive, making it difficult to predict when the sell-off will end.

Evercore's Kirk Materne suggests that the software sector often outperforms the S&P once it bottoms out, but the extent of the current downturn remains uncertain. Investors should watch for further developments in the AI space and how these innovations impact established software companies. The situation highlights the ongoing uncertainty in the tech sector.