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Software company shares are experiencing their roughest beginning to a year in quite some time, dashing hopes that 2026 would mark a turnaround for the battered sector.

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A newly launched artificial intelligence product from tech startup Anthropic earlier this month has reignited investor worries about industry upheaval that plagued software makers throughout 2025. Tax preparation giant Intuit Inc. saw its stock plunge 16% over the past week, the company’s steepest decline since 2022. Adobe Inc. and customer relationship management provider Salesforce Inc. each dropped over 11% during the same period.
New AI tool sparks investor concerns
Morgan Stanley’s tracking of software-as-a-service companies shows the group has fallen 15% since January began, coming on the heels of an 11% decline in 2025. This marks the sector’s most difficult year opening since 2022, based on Bloomberg’s compiled figures.
Anthropic unveiled its Claude Cowork service on Jan. 12 as a “research preview.” The tool can generate spreadsheets from screenshot images or compile draft reports from scattered notes, the company says. Developers built it rapidly, relying heavily on AI technology.
Though the product remains unproven, it exemplifies exactly the kind of competitive threat that has been spooking investors. Jordan Klein, who specializes in technology at Mizuho Securities, notes these fears are reinforcing pessimistic market positions that appear increasingly dug in.
“Many buysiders see no reasons to own software no matter how cheap or beaten down the stocks get,” Klein stated in a Jan. 14 client note. “They assume zero catalysts for a re-rate exist right now,” he added, referring to prospects for improved valuation ratios.
The recent selling wave has widened an already substantial performance divide between software firms and other technology sectors. Concerns about rivalry from emerging AI services are overshadowing qualities like substantial profit margins and dependable recurring income that previously made these companies appealing to market professionals.
The Nasdaq 100 Index is hovering near all-time peaks, yet companies such as ServiceNow Inc. are changing hands at their lowest prices in years. A key issue is that most software producers haven’t demonstrated meaningful progress with their own AI products. Salesforce has promoted uptake of its Agentforce offering, though it hasn’t substantially impacted revenue figures. Adobe has added generative AI capabilities to its photo and video editing programs, but chose not to refresh certain AI-related metrics in its December quarterly earnings announcement.
Established players possess strengths in distribution channels and data access, but they must demonstrate faster growth for stock prices to recover, Wong said. That outcome doesn’t seem probable in the near term.
Chipmakers surge while software lags
Profit growth for software and services firms in the S&P 500 is forecast to decelerate to 14% in 2026, down from approximately 19% growth estimated for 2025, according to Bloomberg Intelligence data. The underlying business outlook appears brighter in other technology segments.
Consider semiconductor manufacturers. Firms like Nvidia Corp. have clearer revenue growth prospects thanks to pledges from technology behemoths, including Microsoft Corp., Amazon.com Inc., Alphabet Inc., and Meta Platforms Inc., to invest heavily in AI infrastructure this year. Semiconductor-linked stocks are anticipated to achieve profit expansion of nearly 45% in 2025, then jump to 59% in 2026, Bloomberg Intelligence reports.
“The reason chipmakers are outperforming is that their fundamentals are getting a lot better and there’s more certainty about their growth given their customers,” said Jonathan Cofsky, who manages portfolios at Janus Henderson Investors. “At the same time, there’s a lot less certainty about how AI will change the software ecosystem.”
Software company valuations continue sliding lower. The Morgan Stanley basket trades at 18 times projected earnings for the coming 12 months—a record low—and far beneath a decade-long average exceeding 55 times.
“The reason software companies had lofty multiples is because they were subscription based, with recurring revenue that you could extrapolate into the future almost forever,” said Osterweis Capital’s Wong. “It is hard to know what multiple they should be trading at if they’re going up against AI agents that are running 24/7 and have the ability to complete tasks, with big projects getting done in a day.”
These reduced valuations, though, are among various elements prompting some Wall Street analysts to express optimism about a sector recovery.
Barclays predicts software stocks will “finally catch a break” in 2026 as client spending stays steady and valuations remain attractive. Goldman Sachs expects growing AI adoption will increasingly benefit software companies by enlarging their total addressable market. D.A. Davidson contends that because narratives have overwhelmed fundamentals for numerous software firms, 2026 presents a favorable moment to selectively re-enter the group.
“We’re not in a position where we can say the turn is here, since existential fears about AI will be here for a while, but the sector does look more interesting,” said Chris Maxey, managing director and chief market strategist at Wealthspire, which oversees $580 billion in assets. “The group isn’t a screaming buy, but we’re getting closer to that.”

France is pushing for the European Union to deploy its strongest trade weapon after US President Donald Trump announced new tariffs on European nations linked to his demand to purchase Greenland.

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Emmanuel Macron plans to ask the EU to activate its anti-coercion instrument following Trump’s announcement of a 10% tariff on products from eight European nations, including France, starting February 1. A person close to the French president, speaking anonymously due to government protocols, confirmed Macron would submit this request on France’s behalf. Macron, who called the tariff threat “unacceptable” on Saturday, has been reaching out to other European leaders about the issue.
Trade deal approval now in question
Trump posted on social media that the tariff rate would jump to 25% in June unless a deal is made for the “Complete and Total purchase of Greenland.” The declaration has thrown existing trade agreements between Washington and Brussels into doubt.
The person familiar with Macron’s position said Trump’s decision to link tariffs to Greenland purchases raises serious questions about a trade agreement finalized between the EU and the US last year. That agreement has been partially put into effect but still requires parliamentary approval, which now appears unlikely to proceed.
EU ambassadors from member nations are scheduled to meet on Sunday to determine how the bloc will respond, according to another person with knowledge of the situation.
Germany’s SPD parliamentary group, which forms part of Chancellor Friedrich Merz’s governing coalition, urged the European Commission to move quickly and develop “concrete countermeasures” against the United States. A person familiar with German planning said the government is reviewing all possible responses but hasn’t settled on specific actions yet.
Manfred Weber, who leads the European People’s Party, the biggest political faction in the European Parliament, declared Saturday that approving the EU-US trade deal is no longer feasible.
Powerful tool remains unused
Finnish Prime Minister Petteri Orpo issued a warning that the European Union “has the means to respond,” though he expressed hope to avoid that outcome. In comments to YLE radio, Orpo said he has called for an emergency European Council meeting to align and craft a unified approach among European nations and Denmark.
The anti-coercion instrument has never been activated since its creation. It was built mainly to discourage aggressive trade actions and, when necessary, to counter intentional coercive moves from other countries that use trade policies to influence EU or member state decisions.
Tariffs, new taxes on tech firms, or particular restrictions on investments within the EU are examples of potential acts under the instrument. Other options include preventing businesses from competing for government contracts throughout Europe or limiting access to specific EU market sectors.
Last year, Macron thought about using the anti-coercion tool, but he changed his mind when the EU and the US were in protracted talks over planned tariffs.

Global markets are once again bracing for volatility after President Donald Trump announced a new round of tariffs on several European countries, explicitly linking the measures to his demand for the acquisition of Greenland.

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While investors have largely treated the move as another iteration of Trump’s familiar trade-war tactics, analysts warn the underlying objective introduces geopolitical risks far beyond previous tariff episodes.
The announcement includes a 10% tariff on imports from Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland starting February 1, with rates set to rise to 25% by June if negotiations fail.
Trump has stated the tariffs will remain in place until a “complete and total purchase of Greenland” is secured.
Markets Focus On Tactics, Not The Target
Trump’s use of tariffs as negotiating leverage is well documented.
Past episodes, including the October 2025 tariff threat against China, followed a familiar pattern with sharp initial market selloffs, heightened weekend rhetoric, and eventual relief rallies as talks progressed.
Investors have increasingly viewed such moves as episodic shocks rather than structural threats.
This time, however, the target differs fundamentally. Greenland is a semi-autonomous territory of Denmark, a NATO member and close U.S. ally.
Linking trade penalties to territorial acquisition moves the dispute from commercial negotiation into the realm of alliance politics.
That distinction has not yet been fully reflected in market pricing, according to several geopolitical analysts, who argue investors may be underestimating the potential consequences if the dispute escalates beyond rhetoric.
A Direct Test Of NATO And EU Unity
European officials have signaled privately that tariffs tied to Greenland would trigger a coordinated response rather than bilateral negotiations.
Under European Union trade rules, any action against individual member states effectively becomes an EU-wide issue, raising the likelihood of collective retaliation.
More critically, an attempt to coerce a NATO ally over territory risks undermining the alliance’s core principle of mutual defense.
While no military action has been announced, even the perception of territorial pressure could accelerate European efforts to reduce dependence on U.S. security guarantees and financial infrastructure.
Dollar Confidence And Long-Term Market Risk
The longer-term concern extends beyond trade flows.
Analysts note that sustained conflict with Europe could weaken foreign confidence in U.S. Treasuries and the dollar’s role as the global reserve currency.
Unlike previous trade disputes with China, which played out between strategic competitors, this episode directly challenges relationships that underpin global financial stability. For now, markets appear to be trading Trump’s tactics rather than his stated objective.
Whether that approach holds may depend on how seriously European leaders treat the Greenland demand in the weeks ahead.

The global financial landscape has been jolted once again as President Donald Trump announced a fresh wave of tariffs targeting eight European nations. As of January 18, 2026, the administration has vowed to impose an initial 10% tariff—set to rise to 25% by June—on imports from Germany, France, the UK, and others. The primary catalyst? A renewed and aggressive push for the U.S. to acquire Greenland.

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While trade wars traditionally impact equities and commodities, the crypto news cycle is now dominated by how these geopolitical tensions will ripple through digital assets.
Bitcoin as a Risk Asset vs. Digital Gold
Historically, Bitcoin has struggled during the immediate onset of trade "shocks." In April 2025, the so-called "Liberation Day" tariffs caused a massive liquidation event, and October 2025 saw $BTC price drop significantly following 100% tariffs on China.
In the current 2026 climate, Bitcoin is trading in a tight range between $94,000 and $97,000. Analysts are divided on the immediate outlook:
The Bearish View: Sharp tariff increases often lead to "risk-off" sentiment. Investors frequently flee volatile assets like $Ethereum and $Solana in favor of gold or cash.The Bullish View: High tariffs are inherently inflationary. As the cost of imported goods rises, the purchasing power of fiat currencies like the Euro and the Dollar may decline. This could eventually drive institutional demand back to Bitcoin as a hedge against debasement.
Market Liquidation and Volatility Risks
The 2025 precedent shows that trade-induced volatility can lead to massive deleveraging. According to data from Reuters, previous tariff announcements triggered billions in liquidations within 24 hours. For traders using high leverage on an crypto exchanges, these sudden "Trump Tweets" or Truth Social posts represent a major systemic risk.
If the EU activates its "Anti-Coercion Instrument" to retaliate, we could see a prolonged period of market instability. During such times, securing assets in hardware wallets becomes even more critical as exchange liquidity can tighten during extreme price swings.
Can the "Crypto President" Save the Rally?
The irony of the current situation is that the Trump administration has been outwardly pro-crypto, even launching its own financial products and ETFs. However, protectionist trade policies often counteract the "crypto-friendly" narrative by strengthening the US Dollar Index (DXY). Since Bitcoin and the Dollar often share an inverse relationship, a "stronger" dollar caused by trade barriers can keep $BTC prices suppressed in the short term.
 
As reported by Bloomberg, the next few weeks will be crucial. If Bitcoin breaks below the $80,000 support level, we could see a deeper correction. Conversely, if it holds the $95,000 mark despite the EU tariff news, it may confirm the "digital gold" thesis for the rest of 2026.

It was in March 2025 that President Donald Trump signed an executive order to establish a strategic Bitcoin (BTC) reserve.

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As per the order, the reserve will consist of Bitcoin forfeited by the U.S. federal agencies as part of asset seizures.
Months have passed since the order and the crypto community is still wondering when the U.S. will formally create its Bitcoin reserve.
Recently, Trump's White House crypto advisor shed light on why it's taking so long for the administration to create the reserve.
Director blames 'obscure' legal hurdles to Bitcoin reserve
Patrick Witt, the Executive Director of the President's Council of Advisors for Digital Assets at the White House, appeared on the "Crypto in America" podcast on Jan. 13.
Though the administration is committed to establishing the strategic Bitcoin reserve, there are “obscure” legal provisions that are holding up the process, Witt said.
He explained the legal hurdles the government agencies are grappling with in order to create the reserve.
“It seems straightforward, but then you get into some obscure legal provisions, and why this agency can't do it, but actually, this other agency could." 
Patrick Witt, Executive Director of the President's Council of Advisors for Digital Assets speaks at the Chainlink's SmartCon 2025 at Metropolitan Pavilion on November 05, 2025 in New York City.
Nonetheless, the Bitcoin reserve is on the administration's priority list and different agencies, including the Department of Justice (DOJ) and the Office of Legal Counsel (OLC), are deliberating the legal and regulatory issues concerning its establishment, Witt reassured.
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Trump's 'Bitcoin superpower' promise unfulfilled
Trump has promised to turn the U.S. into the "Bitcoin superpower" and the "crypto capital" of the world.
However, the lack of progress on the Bitcoin reserve agenda has left the crypto community dissatisfied.
When the White House released its crypto policy report in July 2025, it mentioned the reserve but didn't offer any new details as to its establishment.
In August last year, Treasury Secretary Scott Bessent first said the administration isn't going to buy more Bitcoin to add to the reserve and will use confiscated assets only for the purpose.
A day later, he reversed his stance and said the Treasury is committed to exploring budget-neutral pathways to acquire more Bitcoin to expand the reserve.
When the CleanSpark (Nasdaq: CLSK) chairman and CEO S. Matthew Schultz met Bessent and Senate Banking Committee Chairman Tim Scott in October, he said the two senior officials revealed that the U.S. government holds approximately $17 billion in Bitcoin, which it won't sell, and also plans to continue to accumulate additional BTC.

According to figures displayed on StrategyTracker, the company’s Bitcoin reserves are now valued at roughly $65.3 billion, built from holdings of about 687,000 BTC accumulated across dozens of purchase events. The average acquisition price sits near $75,000 per coin, placing Strategy deep in profit as Bitcoin continues to trade close to the $95,000 level.

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Key takeaways:
Strategy holds roughly 687,000 BTC worth about $65.3 billionThe average purchase price is near $75,000 per BitcoinHoldings are in significant unrealized profit at current pricesAccumulation has continued across multiple market cycles
The chart shared by Saylor highlights a familiar pattern: consistent buying across market cycles rather than attempts to time local tops or bottoms. Large orange markers track Strategy’s purchases over multiple years, showing accumulation during both drawdowns and rallies, while the company’s average cost basis continues to trend upward more slowly than spot price.
Bitcoin exposure grows as supply tightens
Strategy’s position represents a meaningful slice of Bitcoin’s circulating supply, with total supply approaching 19.97 million BTC. At current prices, the firm’s holdings rank among the largest known corporate treasuries globally, reinforcing its role as one of the most aggressive institutional adopters of Bitcoin.
The timing of Saylor’s post comes as Bitcoin trades just below recent highs, with short-term price fluctuations giving way to broader strength on higher time frames. Market data shows modest intraday pullbacks, but performance remains solid over the past week, underscoring sustained demand near record levels.
Saylor has long framed Bitcoin as a superior treasury reserve asset, arguing that scarcity, decentralization, and resistance to monetary debasement make it uniquely suited for long-term capital preservation. The latest figures suggest that Strategy is not slowing its commitment as Bitcoin’s market capitalization approaches $2 trillion.
While Saylor offered no explicit announcement, the post reinforces a consistent message: Strategy’s Bitcoin strategy remains intact, conviction remains high, and exposure continues to grow alongside the asset’s expanding role in global capital markets.
For investors watching institutional behavior, the signal is clear. As Bitcoin supply tightens and prices hover near historic levels, one of its most vocal corporate backers is still leaning further in — not out.

Scott Bessent went on NBC and said Europe cannot secure itself, and that is why Donald Trump, now in his second term as president, is pushing to take over Greenland. He said the United States will not step back.

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He said Europe talks tough but does not have the strength to protect key regions.
Scott dismissed threats from the European Union to block a tariff deal reached last year. He said that the deal is not final and can be changed. He explained that Trump is using emergency powers to force results.
“First of all, the trade deal hasn’t been finalized, and an emergency action can be very different from another trade deal,” Scott said on Meet the Press. He added that Trump “leverages his emergency powers to do this.”
Trump raises tariffs while Bessent defends legal authority and Fed stance
Trump announced a 10% tariff on goods from eight European countries starting February 1. The tariff rises to 25% in June unless there is a deal tied to the purchase of Greenland.
French President Emmanuel Macron called the tariff unacceptable and said he will ask the EU to use its strongest retaliation tool. Scott showed no concern about that response.
On the same show, Scott said it is very unlikely the Supreme Court will block Trump’s use of emergency powers to impose tariffs. A ruling could come as early as this week. “I believe that it is very unlikely that the Supreme Court will overrule a president’s signature economic policy,” Scott said. “They did not overrule Obamacare. I believe that the Supreme Court does not want to create chaos.”
He pointed to a June ruling where the court upheld a key Affordable Care Act provision that created a panel recommending preventive care services insurers must cover at no cost. Scott used that example to argue the court avoids destabilizing major policy.
“The national emergency is avoiding a national emergency,” Scott said. He said Trump is using economic pressure to prevent a military conflict. He framed Greenland as part of a wider strategy that includes Arctic competition, a planned Golden Dome missile shield, and past European reliance on Russian energy. He said that energy dependence helped fund Russia’s war against Ukraine.
When asked if Trump’s posture toward Europe was a bargaining tactic, Scott said the president is not changing course. “Europeans project weakness, US projects strength,” he said. He added that Trump believes stronger security is not possible without Greenland becoming part of the United States.
Scott also spoke about the Federal Reserve. He said the Senate would be “quite happy” with any of the four candidates being considered to replace Fed chair Jerome Powell. “I believe we will probably be hearing from the banking committee soon,” Scott said.
He called for more oversight of the Fed, noting it can print its own money. Last week, Scott publicly denounced the Justice Department decision under Trump to open a criminal investigation into Powell, drawing a clear line between oversight and prosecution.