The software sector is experiencing a significant sell-off, with the IGV ETF down over 4%, triggered by disappointing quarterly results and forward guidance from key players. ServiceNow (NOW) shares plunged nearly 19% after its earnings missed estimates and its guidance for future contracted revenue growth slowed. Alphabet (GOOGL) also dropped over 10% as its revenue missed expectations and concerns grew over its increasing capital expenditures for AI, which led to negative free cash flow. This has sparked broader concerns across the cloud and software industry regarding valuations and the profitability of AI investments.