European software, data-analytics and IT-consulting shares have fallen sharply as investors reassess the value of companies viewed as early adopters of artificial-intelligence tools. Since mid-July, London Stock Exchange Group is down 14.4%, Sage 10.8% and Capgemini 12.3%, while SAP has slid 7.2% after posting its biggest one-day drop since 2020. The declines contrast with broader equity gains: the FTSE 100 is up 2.5% and the STOXX 600 0.6% over the same period. The sell-off followed the release of more capable AI systems, including OpenAI’s GPT-5 and Anthropic’s Claude for Financial Services, which investors say could displace existing software and data-provision business models. Analysts note that many of the affected companies trade on rich valuations—SAP changes hands at roughly 45 times earnings versus a 17-times average for the STOXX 600—leaving them vulnerable to any perceived competitive threat. While European adopter stocks are under pressure, capital is moving toward the infrastructure suppliers seen as enabling the next wave of AI. Bridgewater Associates more than doubled its Nvidia stake during the June quarter to 7.23 million shares, SoftBank has lifted its holding in the chipmaker, and Soros Fund Management has also enlarged its position. Portfolio managers say the rotation underlines a market view that the surest beneficiaries of generative AI remain the companies providing the underlying hardware and cloud capacity.