AI Jitters Hit Software, While Uber, Eli Lilly Outline Growth Plans

Software stocks remained under pressure this week as investors reassessed how artificial intelligence could reshape the sector’s business models. After a sharp selloff in software names, commentators pointed to growing concern that AI tools could displace traditional enterprise software, even as some industry leaders and analysts argued that view was overdone.

On Tuesday, a new product from AI firm Anthropic drew heightened attention, reinforcing existing worries about AI’s long‑term impact on software demand. Although the product was not launched that day, its visibility coincided with renewed selling in the group. Market participants also noted that the pullback extended an already weak period for software stocks rather than starting a new trend.

Despite the negative sentiment, some chip analysts suggested that entrenched players in AI infrastructure, such as Nvidia and Broadcom, remained well positioned, highlighting a divergence between hardware beneficiaries of AI and software companies now facing questions about their competitive edge.

Within software, mobile advertising technology names saw outsized declines. AppLovin shares fell 12% on Wednesday and Unity Software dropped 10%, extending losses from the prior session. The moves reflected both the broader software selloff and specific concerns about disruption in mobile ad tech.

Investors reacted to reports that startup CloudX has brought to market a platform aimed at “rewiring the mobile ad stack using AI agents.” According to industry publication Adexchanger, CloudX uses large language model agents and intelligent monetization in a trusted execution environment, positioning the ad stack as programmable infrastructure rather than another conventional supply‑side platform.

CloudX was co‑founded by entrepreneurs behind MoPub and MAX, and its CEO Jim Payne is targeting automation of many tasks typically handled by engineers and ad operations teams. The prospect of AI‑focused entrants streamlining mobile monetization is adding to pressure on incumbents like AppLovin and Unity, which derive significant revenue from their ad tech offerings.

Uber announced that Balaji Krishnamurthy, its vice president of strategic finance and investor relations, will become chief financial officer, succeeding Prashanth Mahendra‑Rajah, who is leaving after less than three years. Krishnamurthy has spent more than six years at Uber and sits on the board of autonomous driving firm Waabi, underscoring his background in autonomous vehicles.

On the company’s fourth‑quarter earnings call, Krishnamurthy said Uber plans to invest capital in its autonomous vehicle software partners, as well as in AV makers via equity stakes or offtake agreements, and to support AV infrastructure partners. He framed the approach as using the company’s “large and growing free cash flows” to position Uber to compete in an AV‑centric future.

Chief executive Dara Khosrowshahi described autonomous vehicles as a potential “multi‑trillion dollar opportunity” for the platform, asserting that autonomy could amplify Uber’s existing strengths. He said the company expects to be facilitating AV trips in as many as 15 cities globally by the end of 2026, with a roughly even split between U.S. and international locations, and aims to become the largest facilitator of AV trips worldwide by 2029.

For the quarter, Uber reported a 20% year‑over‑year increase in revenue to $14.37 billion, supported by strong demand for food delivery. However, its first‑quarter adjusted earnings and EBITDA forecasts came in below some analyst expectations, leaving shares under pressure even as the stock traded modestly higher in early reactions.

Eli Lilly’s latest outlook underscored the growing financial impact of its obesity and diabetes franchise. The company projected that sales could rise as much as 27% in 2026 to $83 billion, driven in part by its injectable drugs Mounjaro and Zepbound, which are used for diabetes and weight loss.

The guidance contrasted with a more cautious forecast from rival Novo Nordisk, which had disappointed investors earlier. Lilly is also awaiting approval of its weight loss pill, expected as early as this spring, following Novo Nordisk’s approval of a competing pill in December. Eli Lilly’s stock rose about 8% in early trading on the back of the stronger sales outlook.

Market discussion around weight‑loss treatments has widened to include pricing dynamics. In parallel, separate commentary on government programs indicated that prices for related drugs on public platforms could face cuts, though those details were not explicitly tied to Lilly’s guidance.

In semiconductors, analysts highlighted the substantial research and development spending required to compete in AI accelerators. One analyst described AMD’s most recent results as “good, not great,” noting that data center revenue was boosted by $390 million in China sales of its MI 308 chip that may not repeat, and that operating expense growth of about 40% weighed on operating leverage.

Looking ahead, the analyst said AMD is expected to launch its Helios rack‑scale system in the second half of the year, which could narrow the performance gap with Nvidia. AMD plans to ramp its MI 455 and Helios offerings from the third quarter, with greater volumes in the fourth quarter, while also expanding capacity on the server CPU side.

Nvidia and Broadcom were characterized as entrenched leaders in AI, with Nvidia estimated to hold more than 90% market share in AI accelerators and Broadcom maintaining a dominant custom AI ASIC business. Expectations for both companies remain high, but the analyst suggested they are likely to meet those elevated benchmarks given their established positions.