Kim Kahn

Software struggles are getting hardcore.

The sector is selling off sharply, taking tech and the broader market down with it.

The iShares Expanded Tech Software ETF, ticker symbol IGV, is down more than 5%, a drop we haven't seen since Tariff Liberation Day.

That's dragged down the NASDAQ, while Bitcoin, gold, and silver also saw simultaneous selling.

All those asset classes are now off their lows, though.

At the coalface of the software slump is Microsoft, which you heard on Wall Street Breakfast was sinking despite solid, if unspectacular, quarterly results.

Selling has ramped up through the session, with the stock off about 12%, on track for the seventh worst decline in its history.

Today's plunge has wiped out nearly $400 billion in Microsoft's market cap.

If it holds, it would be the second largest single-day loss for a U.S.

company behind last January's NVIDIA drop, when a 17% slide erased nearly $600 billion.

Evercore analyst Kirk Materne says the debate is no longer about demand, it is about capacity, timing, and perhaps allocation.

While Azure growth at these levels remains impressive and continues to suggest market share gains, CapEx rose 66% year over year, and investors are increasingly looking for clearer evidence that this elevated investment is translating into incremental Azure acceleration.

he added.

The real trigger, though, may have been ServiceNow, down more than 10% despite strong results.

Analysts noted that 21.5% subscription revenue growth did not quite represent acceleration, but were broadly positive.

Citizens reiterated its market outperform rating, pointing to revenue growth, free cash flow margin, and a strong leadership team.

Even so, the stock has now shed about 50% of its value over the past year.

Also heavily in the red are Atlassian, Salesforce, Workday, and Datadog.

Among other active stocks, Caterpillar continues to benefit from AI, specifically data center demand, with Q4 results meeting expectations.

Cat said fourth quarter sales rose to $19.1 billion, above the $17.76 billion consensus.