Software stocks face a brutal selloff, with the S&P 500 software index down 25% from October peaks, triggering turmoil in mergers, acquisitions, and IPOs. US bankers report that volatile valuations and AI-driven uncertainty are causing dealmakers to hit pause. Analysts say revenue multiples are shifting too rapidly for buyers and sellers to anchor prices, while fear of AI disruption fuels panic selling. Brex’s $5.15 billion sale to Capital One—a steep drop from its $12 billion October valuation—exemplifies the erosion of deal values.

Meanwhile, OneStream’s $6.4 billion buyout by Hg Capital barely surpassed its IPO price, highlighting investor reluctance. The slump has gone global, with RELX and Wolters Kluwer shares plunging 20%, and Blackstone-backed Liftoff Mobile delaying its IPO. Private equity firms like Vista Equity Partners argue volatility stems from sentiment, not fundamentals, urging calm.

Dealers warn more take-private transactions or stalled IPOs may follow unless valuations stabilize.