European software stocks have declined amid growing concerns about the potential disruptive impact of artificial intelligence on major software companies. Leading firms such as SAP, Salesforce (CRM), IBM, ServiceNow (NOW), Intuitive Surgical (ISRG), Accenture (ACN), Adobe (ADBE), and Palo Alto Networks (PANW) have all entered bear market territory. Bank of America's AI Risk Basket, which tracks companies considered most vulnerable to AI disruption, has underperformed the S&P 500 Index by approximately 22 percentage points since mid-May 2025, after previously keeping pace with the market since the launch of ChatGPT in late 2022. This trend reflects broader market apprehension, as AI tools are increasingly viewed as a risk factor for the software sector globally. The selloff in software stocks is evident both in Europe and the United States, with significant declines in major software and SaaS companies. Meanwhile, stocks like Micron and BigBear have shown divergent performance following recent earnings reports, highlighting differing investor perspectives on the AI trade.