A new wave of agentic AI tools is hitting software stocks where it hurts: per-seat economics.

Investors are pricing a scenario where companies don’t need 1,000 SaaS licenses if a handful of AI agents can handle the workflows, and the market is reacting fast.

The iShares Expanded Tech-Software ETF (NASDAQ:IGV) is coming off a 15% January drop, its worst month since 2008, as fears spread that AI agents may compress the subscription model that powered the last decade of growth.

What Lit The Fuse

Anthropic’s Claude Cowork plugins launched last week with a focus on automating clerical knowledge work across legal, analytics, and administrative functions.

That’s exactly the kind of work that drives enterprise seat counts at major SaaS vendors.

The reaction was swift.

Software names sold off broadly, with investors questioning whether traditional per-user pricing models can survive if AI handles the workflows.

The Data Layer Gets Hit Next

Once the software interface gets cheaper, the market asks an uglier question: why keep paying terminal-like margins for curated data?

The selling bled into cash-cow data names like S&P Global Inc (NYSE:SPGI) and Moody's Corp (NYSE:MCO), but the sharpest hit was in legal data: Thomson Reuters Corp (NYSE:TRI) logged a record ~16% one-day drop as investors priced in new competitive risk to its core legal division after Anthropic's Cowork legal push.

Wolters Kluwer NV (OTC:WTKWY) dropped roughly 13% alongside broader weakness in legal publishing and data services after the Anthropic news hit.

Polymarket Says Google’s Odds Nearly Tripled

While software and data vendors absorb the shock, prediction markets are placing bets on who owns the end state: the companies with compute, models, and distribution.

Polymarket’s market on the largest company by market cap at the end of March shows Alphabet (NASDAQ:GOOGL) odds have surged nearly threefold, from around 10% to 27%.

NVIDIA (NASDAQ:NVDA) still leads at roughly 64%, but the gap is narrowing fast.

The reason is vertical integration.

Alphabet controls the model layer with Gemini, distribution through search and YouTube and Android, and cloud infrastructure.

That gives the company multiple ways to monetize the AI shift.

If AI agents compress SaaS margins, the spend doesn’t disappear.

It likely migrates toward the firms that own the compute and the pipes.

Polymarket is treating this as a power shift trade: horizontal SaaS gets pressured, and the hyperscalers absorb the budget.

Image: Shutterstock

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