AI is not ending software, but it is disrupting tech stocks. The recent “SaaSpocalypse” sell-off reflects growing investor concern about competition from AI companies like OpenAI and Anthropic.
A key catalyst has been Anthropic’s Claude Code, an AI coding tool that analysts see as an important step in the rise of agentic AI. According to SemiAnalysis, Claude Code could increase its share of daily GitHub code commits from about 4% today to over 20% by the end of the year, marking a shift similar in impact to the launch of ChatGPT.
This trend is driving the rise of “vibecoding,” where developers use natural language prompts instead of writing code manually. The result could be faster development cycles and a growing ecosystem of AI agents that can independently handle complex workflows.
While Nvidia has led the AI boom through its GPUs, attention is now shifting toward CPUs, which are expected to play a larger role in agentic AI systems. Arm Holdings stands out as a potential beneficiary of this shift.
According to its CFO, agentic AI will require significantly more CPUs because they are responsible for coordinating AI agents and managing system level communication. Arm is already seeing momentum, with data center royalty revenue more than doubling year over year. The company expects its data center business to eventually overtake mobile as its largest segment.
Despite this growth, Arm trades at a high valuation of around 100 times earnings. However, investors are watching several tailwinds, including rising CPU demand from AI workloads, higher royalty rates from newer architectures like Armv9, and increased adoption of its compute subsystem designs.
With strong data center growth and increasing exposure to agentic AI, Arm remains a key stock to watch in the next phase of AI expansion.
