Is AI really going to kill all software companies? Microsoft just hit its 200-week moving average.

Software has been getting crushed these past two days. Microsoft just hit its 200-week MA. IGV is down 30% from its highs. But forward earnings estimates for software companies are still hitting new highs?? Isn't that a bit of a disconnect? That said, I'm still not touching software at this level. It's not that software has no opportunity — it's that the broader market hasn't even found its footing yet. I'd rather go with strong momentum and high relative strength names — the kind that still tend to be green when the market is red. Software right now is being pinned down by algorithms. Trying to talk fundamentals to it is pointless. Back to PLTR — I think it's getting a bit of a raw deal. Palantir lost 12% in two days, and online everyone's blaming "the conflict ending." But other defense contractors have been rallying after the ceasefire. If anything, this conflict has only proven that defense tech demand will be even stronger over the next decade. The real reason, I think, is that Anthropic released a new multi-agent product, and the market got tunnel vision — "software is doomed" — sending CRM, ADBE, and NOW to new lows. MSFT and PLTR are the two largest holdings in IGV, so when the sector sells off, they naturally take the biggest hit. But should a company with 70% revenue growth and a 50% adjusted operating margin really be getting crushed like this? I'm not buying it. And here's the magical logic bug. The market is currently pricing things as if: "AI will kill all software companies." So here's the question — if that's really true, then the amount of compute we need should be 1,000 times what it is today. So how are NVDA and AMD trading at these valuations? Either chip stocks are irrationally priced, or software is being unfairly sold off. These two cannot both be true. CRWD, PANW — in the AI era, cybersecurity demand will only go deeper. ORCL has $300 billion in RPO from OpenAI and is down more than 50% from its highs, just because it has the word "software" in its name — buried along with the rest. Software right now is a pure stock picker's market. Long term, levels like Microsoft at its 200-week MA will likely look like a good entry point a few years from now — but only if you can pick the companies that will truly transition into the AI era, instead of stepping into value traps. That judgment call is genuinely difficult right now. The market itself hasn't figured it out — which is why it's throwing everything out together. The above represents only my personal views and does not constitute investment advice.