What caused the AI stock selloff this week?

Free and low-cost AI tools pressured SaaS pricing power, while higher inference costs squeezed near-term margins. That mix drove multiple compression and faster factor rotations. Buyers are testing cheaper stacks, delaying expansions, and demanding clear ROI, which hit software leaders first and hardest. Quality balance sheets and cash generators held up better.

Is this a buying opportunity for software stocks?

It can be, but only selectively. Look for firms with gross margins above 75%, durable net retention, positive free cash flow, and clear AI monetization. Use staggered entries and risk controls. Corrections often reset expectations, and leaders with real customer ROI usually recover faster than weaker, no-profit names.

How does Anthropic free AI impact SaaS margins?

Freemium AI raises competitive pressure on pricing and slows expansions, while inference and support costs rise early in product cycles. Vendors that prove fast customer payback, automate workflows, and scale infrastructure efficiently can protect gross margins. Clear packaging and usage telemetry help convert free users to paid without eroding unit economics.

What should I watch on the Nasdaq 100 today?

Watch breadth, sector leadership, and volume around key levels. A positive thrust with improving advance-decline and strong closes can mark risk-on turns. Monitor credit spreads, cloud capex commentary, and earnings guidance on churn and billings. Stabilizing retention and steady cash margins would signal the AI-led pressure is fading.

Global Market Insights

^NDX Today, February 07: AI SaaS Rout Wipes $400B; Buy Case Emerges

ByHuzaifa Zahoor February 8, 2026February 8, 2026

The AI stock selloff intensified this week as free and low-cost tools undercut SaaS pricing, erasing about $400 billion in market value. With Nasdaq 100 today in focus, investors are reassessing software multiples, margin paths, and competitive moats. We break down what is driving the software stocks rout, where valuations may reset, and how to spot potential leaders. Despite sharp moves, a disciplined plan can turn volatility into entries as fundamentals stabilize and cash flows matter more.