Software Selloff vs. Walmart $1T: Start of the “Software Death Loop”?
Software Stocks Crash as Walmart Hits $1 Trillion! Is this the biggest market shift of 2025?
The market is showing a brutal split right now:
Software stocks are getting crushed. While $Wal-Mart(WMT)$ just crossed a $1 trillion market cap, up ~14% YTD — outperforming Apple, Microsoft, and Amazon
1) What happened: software names got hit hard
One of the biggest triggers behind this selloff is the market repricing how fast AI could disrupt parts of the software stack.
After new developments around Anthropic’s Claude (and the broader narrative that AI tools can increasingly replace knowledge-work workflows), investors started questioning:
How much of “software value” is truly defensible anymore? Damage report (single day): ~$285B market cap wiped out
Some notable moves:
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$AppLovin Corporation(APP)$ down ~14%
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$Unity Software Inc.(U)$ & $Palantir Technologies Inc.(PLTR)$ -5%, and 10%
The market fear is simple:
If AI can do parts of what software does, then what’s the moat?
2) Jensen Huang’s response: AI won’t replace software
NVIDIA CEO Jensen Huang pushed back on the most extreme version of the narrative, calling the “AI replaces software” idea illogical.
His point is practical: AI is more like an efficiency layer, not a full replacement. You don’t rebuild Excel from scratch just because AI exists. But the key is:
Only the strongest software categories will survive as “must-haves.”
3) Why Walmart is winning: physical assets + AI = real operational leverage
So why is Walmart suddenly the winner in this narrative?
Not because it’s an “AI company” — but because it owns what AI can’t replace:
physical assets, supply chain scale, and logistics networks.
Some market highlights being discussed:
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~60% of warehouses automated with AI
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~90% of restocking AI-driven
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Partnerships with Google & OpenAI
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Conversion rates reportedly up ~22%
4) “Software death loop”: JPMorgan views BDCs are becoming the credit risk hotspot.
This selloff becomes more dangerous when it shifts from equity panic to a broader credit stress narrative.
JPMorgan’s take is that the selloff in software — and other industries perceived to be exposed to AI disruption — has shown little sign of easing.
More importantly, JPMorgan warns the risk is increasingly migrating from stocks into credit markets, with Business Development Companies (BDCs) turning into a key pressure point.
According to JPMorgan, BDCs hold roughly: $70B in software-related loans, around 16% of their total portfolios
After the sharp software drawdown, these loan-linked assets may become mispriced or “dislocated.”
5) If the paradigm is shifting… how to position?
Discussion: what’s your take? 👇
So what’s really happening here?
Is this just a short-term panic… or a real regime shift?
Do you think this is:
A) the beginning of the end for software stocks, or
B) an overreaction that creates a buying opportunity?
Leave your comments to win tiger coins!
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$Wal-Mart(WMT)$ 达到1万亿美元是有意义的，因为人工智能正在以物理规模和运营复杂性放大业务。人工智能将沃尔玛的物流和供应链转化为真正的利润杠杆，而许多软件公司现在必须证明它们是必不可少的，而不是可选的。
所以我倾向于B：这是一种过度反应，不是软件的终结。但是 $摩根大通 Chase(JPM)$ 摩根大通信用警告很重要——如果压力蔓延到BDC，波动性还没有结束。机会是有选择性的：只有具有关键任务角色和定价能力的软件才值得反弹。
@Tiger_comments @TigerStars @TigerClub
No Agentic AI can replicate the sheer physical grit of 5,000 stores or the complex machinery of global fulfilment.
By using its massive footprint into high velocity AI hubs & a high margin advertising juggernaut, Walmart has successfully shed its old retail skin to become a tech powered titan.
Walmart isn't just selling groceries anymore. It is selling an automated hyper efficient future where logistics is the new software.
While the SaaS sector may tremble, Walmart's trillion dollar milestone is an achievement that the late great Sam Walton, Founder would be proud of. From a single variety store in 1962 to today's crowning success, this achievement remains rooted in his original Every Day Low Price philosophy.
@Tiger_comments @Tiger_SG @CaptainTiger @TigerClub @TigerStars
Mid tier companies like AppLovin and Unity are struggling against the "death loop" created by generative AI tools like Anthropic's Claude. Claude is increasingly automating mid level knowledge workflows. The reasoning is that if a software only automates a workflow that an AI agent can do it for free, the business model is walking the plank.
However $Palantir Technologies Inc.(PLTR)$ is gaining traction because it isn't just a tool. Palantir is the operating system for the AI era. While others are being replaced by AI, Palantir's AIP or Artificial Intelligence Platform is the one doing the replacing, helping enterprises integrate the very models like Claude that are disrupting everyone else.
Verdict : The software era is evolving into the Agentic era. Adapt or evaporate.
@Tiger_comments @Tiger_SG @TigerStars @TigerClub
rotation to value stocks is a normal market cycle
Recent trends show market section rotation and "AI won't replace software".
Great article, would you like to share it?