AI application software stocks extended the previous day's decline, with Datadog, MongoDB, and Gitlab falling over 7%, Figma dropping more than 6%, and Reddit, Servicenow, Applovin, and Unity all down over 5%. Palantir, Snowflake, Salesforce, and SAP each dropped more than 4%.

On the news front, software stocks saw a strong rebound on Monday, with Jensen Huang’s latest argument—that AI agents will create a massive multiplier effect in software tool usage—temporarily easing investor anxiety. Mizuho analyst Daniel J. O’Regan pointed out that the culprit of this sharp decline was programmatic trading, not a fundamental shift in the AI narrative. He commented: “There’s no logical reason; it looks like some quant funds are selling a factor basket or a custom index.” (Gelonghui)