Software, <b>Cybersecurity</b> Stocks Tank. Anthropic and OpenAI Fears Rattle the Sector

Software, Cybersecurity Stocks Tank. Anthropic and OpenAI Fears Rattle the Sector

Software stocks fell hardly on Thursday, with cybersecurity names leading the decline as investors weighed fresh fears that advanced artificial intelligence tools could expose weaknesses in legacy systems, while geopolitical uncertainty also lingered.

Qualys QLYS dropped 13%, while Cloudflare NET, Tenable TENB and Zscaler (ZS) each fell about 11%. Anthropic said its Claude Mythos model can find hidden security flaws, and it shared the system with about 40 companies, including CrowdStrike CRWD and Palo Alto Networks PANW.

ServiceNow (NOW), Appian (APPN), Oracle ORCL, Salesforce CRM, Samsara (IOT), Intuit (INTU), Autodesk (ADSK), HubSpot (HUBS) and Palantir PLTR also fell. Palantir, once resilient in the 2025 software selloff, is now down 27% this year.

OpenAI is also preparing a model with similar cybersecurity features for a limited rollout. The iShares Expanded Tech-Software Sector ETF (IGV) slid nearly 5% and is down 28% year to date.