Tesla Bull has a message for everyone spooked by trillion-dollar bloodbath in software stocks worldwide: I think this will…
Tesla Bull has a message for everyone spooked by trillion-dollar bloodbath in software stocks worldwide: I think this will…Dan Ives of Wedbush Securities, rather known as “Tesla bull,” calls the historic selloff a “generational buying opportunity” even as $2 trillion vanishes from software market caps The numbers are brutal. Salesforce is down 27% this year. ServiceNow has shed nearly 29%. Microsoft has lost about 16%. And across the broader software sector, roughly $2 trillion in market value has evaporated over the past year —what JPMorgan called the largest non-recessionary drawdown of its kind in over three decades. For investors, it’s been a gut-punch.But Dan Ives, managing director and senior equity research analyst at Wedbush Securities, isn’t running. He’s buying.“I think this software selloff will go down as a generational opportunity to own some of the stalwarts,” Ives said in a recent Yahoo Finance interview, calling himself “more emboldened” about the bull case for tech despite the carnage.Why investors hit the panic buttonThe selloff wasn’t random. It was sparked—at least in part—by Anthropic’s Claude rolling out a new legal tool capable of handling tasks across legal, sales, marketing, and data analysis. The move signalled that large language models were pushing aggressively into enterprise software territory, muscling into the “application layer” where companies like Salesforce and ServiceNow have long made their money.The fear: if AI can do the job cheaper and faster, why pay for the software at all?Deutsche Bank’s Jim Reid put it bluntly. As recently as October, markets were pricing in a world where “almost every tech company would come out a winner.” That optimism has since unravelled fast, with the repricing rippling well beyond tech into legal, logistics, and consulting sectors.The bull case: switching costs and decades of dataIves isn’t dismissing the disruption—he’s reframing it. Companies like Salesforce sit on decades of proprietary customer data and deeply embedded enterprise relationships, things an AI plug-in simply can’t replicate overnight. Digital security requirements and high switching costs give legacy software players a meaningful edge, he argues.JPMorgan analysts backed that view, calling the AI-disruption narrative an “overly bearish outlook” and noting that multiyear contracts and deep integration complexity make rapid displacement unlikely anytime soon. Goldman Sachs CEO David Solomon also weighed in, calling the selloff “too broad.”The bears aren’t backing down eitherNot everyone is reassured. Deutsche Bank’s Reid cautioned that even by year’s end, there won’t be enough evidence to identify structural winners and losers with confidence—leaving plenty of room for investor imagination, both optimistic and pessimistic, to run wild.For now, Ives is betting the bold get rewarded. Whether this is the bottom or just a pause in a longer unwind is the question every software investor is sitting with.
