Global software stocks came under pressure as fears over the impact of artificial intelligence continued to weigh on the sector, even as London's FTSE 100 closed at a fresh record high. The blue-chip index finished 87.75 points higher at 10,402, with investors rotating into traditional "old-economy" companies.
Leading the risers on the FTSE 100 was gambling firm Entain, up 10.4%, followed by services company DSS (+7.8%) and pharmaceuticals group GSK (+6.9%), which hit a 26-year high after reporting results. Insurer Beazley also rose nearly 6.9% after Zurich Insurance reached an agreement on "key terms" of an £8bn takeover offer.
However, accountancy software firm Sage fell 2.9% as the launch of an AI legal tool by Anthropic continued to upset data software companies across Europe, the US and Asia-Pacific. On Wall Street, chipmaker AMD dropped 12% after its first-quarter forecast missed expectations, while software firm AppLovin slid 13.2% on AI concerns.
The tech selloff was not universal, however. Deutsche Bank noted "some brutal moves" among US tech stocks, but pointed out that the "Magnificent Seven" index as a whole was only about 1% off its peak, despite six of the seven names being down between 5% and 25%. Alphabet, the outlier, has gained about 75% over the last six months, adding roughly $1.7 trillion in market value.
Elsewhere, Uber shares fell 5% in early trading after the ride-hailing company missed profit forecasts despite record demand. It reported earnings per share of $0.71 for the fourth quarter, below the $0.79 expected, and guided current-quarter adjusted EPS at 65-72 cents, also short of consensus. The company said it had a "record-breaking quarter" with more than 200 million monthly users.
In economic data, the US services sector expanded for a third year, with January's PMI rising to 52.7 from 52.5. However, tariff uncertainties and economic headwinds continued to limit growth, while inflation remained elevated but had eased since the end of 2025. James Reilly, senior markets economist at Capital Economics, said the recent software falls did not indicate waning enthusiasm for AI, arguing investors would continue to judge that the benefits of AI would outweigh the costs.
