On Thursday, Wedbush analyst Dan Ives said that Wall Street is punishing software stocks like Salesforce Inc. (NYSE:CRM), ServiceNow Inc. (NYSE:NOW) and Microsoft Corp (NASDAQ:MSFT) as if they are no longer relevant in the AI age.

Ives: Historic Selloff Unlike Anything Before

Speaking with Bloomberg, Ives addressed the ongoing drawdowns in software stocks. "I could tell you in 25 years, this structural sell-off in software is unlike anything I’ve ever seen."

He continues saying that investors are treating software companies as if "software doesn't have space" in today's AI age.

"You have to assume that they’re not just taking the street numbers. You have to assume that they’re actually declining the next few years," he said. 

Ives added that the valuations indicate that some companies could lose about 5% of their customers.

AI Is A Headwind—But Not A Death Sentence

During the conversation, Ives admitted that AI is disrupting the software industry, but said that thinking they have become obsolete is going too far.

He cited Palantir Technologies (NASDAQ:PLTR) as a prime example of how software can still make it in today's age.

Software Stock Performance Amid AI Selloff

CRM shows a weak price trend across the short, medium and long term, along with a low value ranking, according to Benzinga Edge Stock Rankings.

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