Software stocks have been hammered in 2026. The rise of AI coding tools — from Claude to other large language models — has sparked fears that barriers to entry are collapsing.

But according to ECP Asset Management’s Damon Callaghan, the market has overreacted. Speaking to Sean Aylmer, he argues the sell-off has been indiscriminate, and that while some software businesses will struggle, others may actually become stronger - if they have the right competitive advantages.

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