IGV Slumps 24% in Q1 Amid Growing Fears of AI Disruption

The iShares Expanded Tech-Software Sector ETF (IGV) has posted its worst quarter since the 2008 global financial crisis, plummeting over 24% in Q1 2026.

This steep decline is attributed to growing concerns that advanced AI agents could render traditional enterprise software less essential. As a result, investors are reassessing valuations across the industry, leading to significant losses for major players.

Salesforce Inc. (CRM) and ServiceNow Inc. (NOW) experienced particularly sharp declines, dropping over 30% in Q1, while Workday plummeted nearly 40%. Meanwhile, energy stocks and AI-focused chipmakers have seen increased capital inflows.

Dan Ives, managing director at Wedbush Securities, believes the downturn is excessive and that major players will continue to benefit from expanded spending on enterprise software due to AI's structural drivers.