Tech analysts Dan Ives to everyone in the market battering tech stocks: AI is not a ‘death sentence’ for software companies it is a …

Tech analyst Dan Ives of Wedbush has now warned that Wall Street is overrating to the rise of artificial intelligence, pushing software companies as if they are obsolete. Speaking to Bloomberg TV in an interview, Ives explained the present downturn as unprecedented, “In 25 years, this structural sell-off in software is unlike anything I’ve ever seen.” Software giants such as Salesforce, ServiceNow and Microsoft have been hit hard with valuations suggesting investors expect declining relevance in the AI era. As per Ives, some models even imply that these companies could lose about 5% of their customer base in the coming years.

AI as headwind and now a death sentence

Ives also acknowledged that AI is reshaping the industry, but he rejected the notion that software companies are facing any kind of extinction. “Software doesn’t have space in today’s AI age” is how investors seem to be treating them, he said, but emphasized that this view is misguided. Explaining his stance, Ives pointed to Palantir Technologies as an example of a software company which is thriving by integrating AI into its offerings. The message: AI may be disruptive, but it is also an opportunity for software firms to evolve and remain central to the tech ecosystem.Ives’ comments align with those of Nvidia CEO Jensen Huang, who recently dismissed the idea of software obsolescence at the Cisco AI Summit. Huang called the notion “illogical,” stressing that AI systems fundamentally rely on software and cannot replace it.“There’s this notion that the tool ‌in the ‍software industry is in decline, and will be ‍replaced by AI … It is the most illogical ‌thing in the world, and time will prove itself. If you were a human or robot, artificial, general robotics, would you use tools or reinvent tools? The answer, obviously, is to use tools … That’s why the latest breakthroughs in AI are about tool use, because the tools ‍are designed to be explicit,” Huang said at the event.Huang argued that AI will continue to rely on existing software rather than rebuild basic tools from scratch, pushing back against investor fears of AI-driven disruption in the data and professional services industry.