How exposed are software stocks to AI tools? We put vibe-coding to the test

In recent weeks, there has been a notable decline in the stocks of software, legal services, and video game companies. This downturn is largely driven by fears that emerging AI technologies could potentially disrupt these industries. To explore the validity of these concerns, CNBC's Deidre Bosa and I decided to put Anthropic's AI coding tool, "Claude Code," to the test. Our ambitious goal was to create a replacement for Monday.com, a popular project management platform valued at $5 billion. Despite lacking any coding expertise, we approached this challenge with curiosity. Utilizing AI tools that enable users to build functional applications through simple English commands, we aimed to see what we could achieve. We began by instructing Claude to develop a project management dashboard akin to Monday.com, incorporating essential features such as multiple project boards, assigned team members, and a status dropdown. Remarkably, within minutes, we had a working prototype. Next, we encouraged Claude to independently research Monday.com, identify its primary features, and replicate them. This led to the AI adding several additional functionalities, including a calendar feature. The most impressive aspect was when we connected the prototype to an email account, transforming it into a personalized project manager. The AI even unearthed a forgotten calendar invite for a birthday party and added reminders for other important tasks, all in under an hour. If we had been paying users, the estimated cost for this endeavor would have ranged from $5 to $15 in compute credits, a figure that could decrease as more data centers become operational. Investors are now left pondering which companies are most vulnerable to this disruption. According to insights from Silicon Valley insiders, firms that provide supplementary tools—such as Atlassian, Adobe, HubSpot, Zendesk, and Smartsheet—are at higher risk as they are not integral to core business operations. In contrast, cybersecurity companies like CrowdStrike and Palo Alto Networks appear more resilient due to their established network effects, making them difficult to replicate. While systems of record, like Salesforce, provide a buffer against such disruptions, they are not entirely immune. The ongoing sell-off in the software sector presents an opportunity for investors to discern between essential services and those that are merely supplementary.