Stocks in the software sector moved lower Thursday, led by a 7% decline in Palantir Technologies (NYSE:PLTR), as the market digested a spate of AI product launches and investor commentary flagging intensified competition.
The iShares Expanded Tech-Software Sector ETF fell 3.7% on the session. Several of the ETF’s largest holdings, including Palantir, Microsoft, Oracle, Salesforce, and Palo Alto Networks, all traded down as investors weighed the implications of fresh AI offerings from major players and startups alike.
Market attention centered on new models and toolkits from AI developers. Meta introduced a new artificial intelligence model, while Anthropic rolled out Claude tools designed for building agents. Additional concern surrounded Anthropic’s Mythos model - a release that has prompted industry scrutiny for its reported gains on software engineering benchmarks.
"Anthropic is eating $PLTR Palantir’s lunch. That massive boost from $9B to $30B ARR at Anthropic is because Anthropic offers the easier, cheaper, intuitive solution for businesses. PLTR can have government, which is low margin and small."
Those comments, from investor Michael Burry, singled out Palantir as particularly exposed to competition from Anthropic, and were cited by market participants as a factor in the stock’s weakness.
Anthropic disclosed that its Mythos model produced notable improvements versus its prior Opus 4.6 model. According to the company’s system card, Mythos delivered a 17 percentage point improvement on Terminal Bench 2.0 and a 13 percentage point improvement on SWE bench-verified benchmarks.
"Anthropic’s Mythos model exhibits a step-jump in benchmark performance across software engineering tasks, a deviation from the trajectory of incremental/moderate improvements in the recent past. Mythos provides a large improvement in agentic software development, based on qualitative assessments. We believe that the model raises near- to medium-term disruption risks for IT services with the caveat that model capabilities are largely unproven in real-world scenarios due to a lack of a public release."
The observation, from Kawaljeet Saluja at Kotak Institutional Equities, emphasized the scale of the benchmark gains and flagged potential disruption to IT services while noting that real-world capabilities remain to be fully demonstrated publicly.
Additional market messaging in the session highlighted subscribed research tools and valuation calculators available to investors evaluating names such as Microsoft, though those product references were presented as part of broader market commentary rather than direct drivers of the price moves.
Context note: The trading moves described above occurred amid fresh AI product announcements and investor commentary; the practical, widespread impact of newly released models was noted as not yet fully proven in public, live deployments.