Anthropic’s AI Model Mythos Sparks Sell-Off in US Software Stocks

Anthropic’s AI Model Mythos Sparks Sell-Off in US Software Stocks

Anthropic’s newly announced AI model, Mythos, has triggered a fresh sell-off in US software stocks, reigniting fears that artificial intelligence (AI) can disrupt the industry faster than it can handle. The catalyst is Anthropic’s powerful new AI model, called Claude Mythos, which the company has decided against a wide public release after determining it could expose hidden cybersecurity vulnerabilities that have existed, undetected, for years.

The company says that the AI model is so powerful that its access has been restricted to a group of approximately 40 major technology companies, including Microsoft and Google. This has led to a drop in shares of major cybersecurity companies including Zscaler, Cloudflare, Okta, and CrowdStrike, among others, according to news agency Reuters.

Market Reaction to Anthropic’s Mythos

The S&P 500 Software and Services Index fell 2.6% on Thursday (April 9) – the index is now down 25.5% since January – one of the worst-performing segments of the US market in 2026, Reuters said. Cybersecurity firms were among the hardest hit, with Cloudflare, Okta, CrowdStrike, and SentinelOne all dropping between 4.9% and 6.5%.

Zscaler was among the biggest decliners on the entire S&P 500, falling 8.8% after brokerage BTIG downgraded the stock from “buy” to “neutral”, citing concerns over demand and rising competition.

Enterprise software names such as Atlassian, Workday, Adobe, Salesforce, and Intuit, all dropped between 3.7% and 6.8%. The sell-off also spread to Europe, where SAP, Capgemini, and Temenos fell between 3% and 7%.

What Anthropic’s Announcement Actually Revealed

The market’s reaction was not simply about one unreleased AI model. It was about what that model’s existence implies – if AI can find vulnerabilities that cybersecurity companies have missed for years, what exactly are those companies selling?

“We’re getting back to being concerned about the prior software-specific concerns stemming from AI and private credit that are coming back to the fore,” said Sosnick, chief market analyst at Interactive Brokers, was quoted as saying.

Wednesday (April 8) had offered the software sector a temporary escape after optimism surrounding a US-Iran ceasefire which lifted broader market sentiment.

Impact on Palantir Technologies

Palantir Technologies (NYSE:PLTR) fell 7% Thursday as software stocks declined following new AI product launches and comments from short seller Michael Burry about competitive threats. Burry specifically highlighted Palantir’s vulnerability to competition from Anthropic, writing that “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.”

The iShares Expanded Tech-Software Sector ETF dropped 3.7%, with top holdings including Palantir, Microsoft, Oracle, Salesforce, and Palo Alto Networks all trading lower. The selloff came after Meta unveiled a new artificial intelligence model and Anthropic launched Claude tools for building agents.

Kotak Institutional Equities’ Analysis

Kotak Institutional Equities analyst Kawaljeet Saluja commented, “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.”

In conclusion, Anthropic’s AI model Mythos has sparked a sell-off in US software stocks, reigniting fears of AI disruption. The market’s reaction is not simply about one unreleased AI model, but about what that model’s existence implies – if AI can find vulnerabilities that cybersecurity companies have missed for years, what exactly are those companies selling?