Shares of the French software developer collapsed 21%. Is the "software apocalypse" intensifying?

Shares of French software developer Dassault Systèmes at trading in Paris on February 10 at an intraday low collapsed by more than 21%, writes CNBC, noting that today could be the worst day in history for the company's securities. This occurred against the background of a sell-off of shares of software companies in the market, as well as the publication of Dassault Systèmes on February 11 quarterly reports, in which it reported a decline in revenue from software in the fourth quarter of 2025 by 5%.

In a quarterly report that crashed Dassault Systèmes' securities, the company also reported total revenue, which was flat year-to-date through 2024 at €6.24 billion ($7.43 billion). And software revenues totaled €5.64 billion.

The data was below market expectations, CNBC points out, noting that analysts had expected to see the company's total revenue at €6.3 billion, according to LSEG forecasts.

Software companies were at the center of a big sell-off last week, linked to investor fears that AI could bring down their businesses: Anthropic's new artificial intelligence tools triggered a sell-off in shares of software-as-a-service (SaaS) firms and data providers. As of Feb. 5, the "software apocalypse" had destroyed about $830 billion in market value in the software and IT services sector over the previous six sessions.

European software companies - whose services could come under pressure from more advanced AI tools, including SAP, Dassault Systèmes and Reply - are expected to see their earnings-per-share growth slow to 13% from 17% a year earlier, according to Bloomberg Intelligence.

Dassault Systèmes' results were "worse than even the most pessimistic forecasts," said JPMorgan analyst Toby Ogg.

On the other hand, European chip and semiconductor equipment makers - companies providing the infrastructure for the AI boom, including Infineon Technologies and ASML - are expected to increase profits by 21% in 2026, compared to growth of just 7% in 2025, Bloomberg specifies.

"AI will constrain IT companies' revenue growth over the next 1-2 years as revenue deflation in existing business lines more than offsets new revenue from AI adoption," said Jefferies analyst Akshat Agarwal. Current valuations do not yet fully reflect this risk, which could put pressure on market multiples, he said.

The sell-off in shares of companies exposed to AI risks is likely to continue as the market tries to identify future winners and losers given the new AI realities, Bloomberg notes. The gap in the performance of software and hardware company securities has only widened since mid-2025. "We are at a stage where investors are actively buying AI beneficiary companies and equally actively selling those deemed vulnerable to its impact. Sometimes, in our view, indiscriminately," according to UBS strategists led by Jerry Fowler.

Over the last month, Dassault Systèmes securities have lost more than 20% of their value. According to analysts of JPMorgan, the market has gone too far in soft-sale and now takes into account in prices the worst scenarios connected with influence of AI on software companies. However, the realization of these scenarios is "unlikely," at least in the next three to six months, the analysts believe.

This article was AI-translated and verified by a human editor