IT stocks crash: JPMorgan analysts decode the logical and illogical reaction

Following the sharp fall globally in IT stocks amid fears of the impact of a new wave of AI disruption, global brokerage firm JPMorgan says much of the reaction has veered from logical concern into outright capitulation. “Software collapse broadens with nowhere to hide as AI rate-of-change is extrapolated in both logical and illogical ways,” JPMorgan analyst Mark Murphy wrote in a note to clients, arguing that markets are “overwhelmingly” focused on AI headlines, while underweighting the underlying resilience of enterprise software businesses. Murphy highlighted that the IGV tech‑software ETF was down about 5 per cent intraday, taking the sector back towards levels last seen during the “peak tariff and DOGE fears” of early April 2025. The damage is now “very broad,” hitting mega‑caps and small‑caps alike, with stocks that were once viewed as relatively insulated from AI disruption, such as Cloudflare, Datadog and Snowflake, dropping “roughly 9-11 per cent” in Tuesday’s trade. The latest leg of the crash has been triggered by Anthropic’s launch of its Claude Cowork plug‑ins, which span legal, sales and marketing, finance and accounting, data analysis, productivity and search. These plug-ins effectively turn Claude from a text chatbot into an agent that can execute tasks across a user’s Mac files and browser.