AI Stocks Reset In 2026 Amid Software Reckoning, Hyperscaler Capex Boom

• Software stocks face a 'SaaS-pocalypse' as concerns grow that AI agents and coding tools will disrupt traditional software-as-a-service business models and per-seat pricing structures
• Four major hyperscalers are expected to spend $645 billion on AI infrastructure in 2026, up $230 billion from 2025, with companies like Google raising $9 billion through bond sales to fund AI ambitions
• Most major AI stocks are down year-to-date including Palantir (-26%), Salesforce (-28%), Oracle (-18%), Amazon (-14%), and Microsoft (-17%), with Nvidia earnings on Feb. 25 expected to bring additional volatility

AI Stocks Reset in 2026 Amid Software Concerns and Hyperscaler Spending Surge

Market Overview:

AI stocks have experienced significant volatility in early 2026, with many top performers from 2025 retreating sharply. Market rotation has shifted away from tech toward energy, materials, consumer staples, and healthcare sectors. All major hyperscaler companies, including Amazon, Alphabet, Meta, Microsoft, and Oracle, are trading negative year-to-date as of February 17.

Key Performance Data:

Four hyperscalers (Google, Amazon, Meta, Microsoft) are projected to spend $645 billion in 2026—a 56% increase representing $230 billion growth. Despite strong balance sheets, companies like Google and Meta are borrowing to fund AI infrastructure, with Google raising funds through new bond sales.

Software Sector Under Pressure:

Software stocks face a "SaaS-pocalypse," with concerns that AI agents and automated coding tools from OpenAI and Anthropic will disrupt traditional software-as-a-service business models. Notable declines include Palantir (-26% YTD), Salesforce (-28%), Oracle (-18%), Amazon (-14%), and Microsoft (-17%). The launch of "OpenClaw" open-source software and Anthropic's "Cowork" tools has accelerated the sell-off.

Bright Spots:

Data center plays are outperforming, with Vertiv Holdings (+45% YTD), Lumentum (+52%), Ciena (+30%), and CoreWeave (+34%) posting gains. Arista Networks is up 8% in 2026.

Key Catalyst:

Nvidia earnings on February 25 could trigger additional volatility, with increased competition for GPUs and investor focus on 2027 sales visibility.

Major Concerns:

Growing debt loads, infrastructure depreciation, power grid capacity constraints, rising electricity prices, and the "circularity" of AI ecosystem investments are raising bubble concerns among investors.