Lana

That's why investors fleed stocks like Datadog, CrowdStrike and Workday this week, setting the software sector on track for its worst month since 2008.

Lenders are getting antsy too, demanding tougher terms and higher interest rates on loans to software companies.

That's awkward for private equity, PE firms like Apollo, Aries, Blackstone and Blue Owl, which have spent years lending to and buying software businesses.

If those companies start struggling, the PE firms behind them could take a hit.

Investors are treating almost all software stocks the same, but chances are some will come through this on top.

The best-placed firms are the ones that sit at the core of their customers' businesses, holding crucial data, powering daily workflows, and being so wired into team routines that ripping them out would be painful.

So even if AI agents become the go-to, companies that have their existing software heavily integrated will probably add AI to those systems rather than replace them.

Over time, you should see that gap between nice-to-have tools and core plumbing show up in which software firms hold on to customers, keep raising prices, and end up with the strongest stock performances.

Along with software, investors are dumping everything from wealth managers and insurers to real estate and logistic firms, worried that AI will undercut a lot of the advice-giving and form-filling those businesses get paid for.

Meanwhile, utilities, energy, and materials are back in demand as investors look for companies that own tangible, real-world assets rather than strings of code.

That's it for today.

I'm Lana, I'll see you tomorrow.

Hey, I'm Lana with your Daily Brief for Tuesday, February 24th.

Coming up, the Supreme Court ruled America's sweeping tariffs illegal, so the U.S.

president imposed some different ones.

And Novo Nordisk's new weight loss drug came up short, leaving rival Eli Lilly firmly in the lead.

We'll also check in with Carl to get his answers to your burning questions.

More on the way, but first, a word from Guy at Finimize HQ.

America's Supreme Court dropped a hammer on Friday, deeming the U.S.

president's sweeping reciprocal tariffs illegal.