Back in February, the release of AI giant Anthropic's latest plug-in triggered a sharp selloff across technology stocks, fuelling fears that artificial intelligence could disrupt the traditional software industry. The episode quickly came to be known as the "SaaSpocalypse."
Jefferies was among the first brokerages to coin the term, highlighting a dramatic shift in investor sentiment from "AI helps these companies" to "AI replaces these companies." Describing the intensity of the selloff, Jeffrey Favuzza from Jefferies' equity trading desk told Bloomberg that trading had turned into outright panic, with investors rushing to exit positions. "Trading is very much 'get me out' style selling," he said.
