The Asteroid Fear Is Back, and Software Is Not Going Extinct

Dinosaurs did not disappear because they were weak. 

They became extinct because the world changed faster than they could adapt. 

The Chicxulub crater was formed slightly over 66 million years ago when an asteroid, about ten kilometers or six miles in diameter, struck Earth. Conditions shifted almost instantly. 

Survival no longer depended on size or dominance. It depended on flexibility.

Markets work the same way.

Right now, artificial intelligence is being treated like that asteroid. 

The story says it will wipe out entire industries, starting with software. Stocks have sold off as if extinction is inevitable. Fear has replaced analysis.

That framing is wrong.

AI is not destroying software. It is forcing a transition. And transitions always look more violent in prices than they are in business reality.

Enterprise software is not a collection of apps that can be swapped out overnight. These platforms run payroll, accounting, compliance, security, design, logistics, customer data, and daily operations. 

They are embedded in how large organizations function. They are supported by contracts, regulations, integration work, and years of institutional knowledge.

That infrastructure does not vanish because a new AI tool can summarize a document or draft a contract faster.

The belief that corporations will rip out mission-critical systems in favor of improvised tools is a market narrative, not a corporate strategy. 

Large companies move carefully. They protect stability. They value continuity. They adopt new technology by layering it into existing systems, not detonating what already works.

What has changed is the growth story.

For more than a decade, software lived in a near-perfect environment. 

Interest rates were low. Headcount expanded. Seat counts grew steadily. Pricing power felt automatic. Margins widened quietly in the background. Investors paid premium valuations because growth looked smooth and predictable.

That world is gone.

Layoffs are happening. Fewer employees mean fewer licenses. Tighter budgets slow buying decisions. Sales cycles stretch. Customers scrutinize renewals more aggressively. 

Internal AI projects absorb budget and attention even when they are not meant to replace existing platforms.

None of this kills software.

It slows it.

Companies like Salesforce, Adobe, and GoDaddy did not suddenly lose relevance. What they lost was the assumption of easy growth.

Markets struggle with that distinction. They tend to leap from confidence straight to catastrophe. That is how high-quality companies end up down 30% while their products remain essential to customers.

We have seen this pattern before.

In 2011, investors believed cloud computing would hollow out established technology companies. Microsoft was dismissed as slow and obsolete. The narrative sounded thoughtful and forward-looking. 

It was wrong. 

The platform mattered. Customer relationships mattered. Cash flow mattered. 

Microsoft adapted, executed, and compounded. Since June 30, 2011, the stock has climbed close to 2,000%.

AI is following the same script.

The winners will not be the companies with the loudest demos or the boldest promises. They will be the ones who already control distribution, data, trust, and workflow. Those advantages are boring in headlines, but powerful over time.

This is where discipline separates investors.

When prices fall, investors crave certainty. They want a clear explanation. Markets rarely provide that during periods of transition. What they do provide is mispricing when fear outruns fundamentals.

Valuations across software have compressed sharply. That alone does not make everything cheap. But it changes the equation. Companies no longer need flawless execution to justify their prices. They need durability and adaptability.

Long-term capital understands this. Private equity understands it best. When expectations collapse faster than cash flow, ownership quietly changes hands. That process repeats across cycles.

The United States remains the global leader in software. It remains the global leader in artificial intelligence. It remains the deepest and most flexible capital market in the world. Those foundations did not crack this quarter.

What cracked was complacency.

AI is reshaping how software companies grow. It is reshaping negotiations. It is reshaping how value is captured. Some companies will struggle to adjust. Others will integrate AI into their platforms and strengthen their position.

Extinction is the wrong metaphor.

Evolution is the right one.

At American Prosperity, we do not invest based on panic. We invest in ownership. We focus on businesses with real customers, recurring cash flow, and the ability to adapt when conditions change. 

AI alters the slope of growth. It does not erase it.

The asteroid ended an era, not life itself. Leadership changed. The environment shifted. Those that adapted survived and eventually thrived.

The same process is unfolding in markets today.

This is not the end of software. It is the end of easy assumptions. Strong businesses will keep compounding. Weak stories will fade. Capital will flow toward durability.

That pattern has repeated through every major technological shift in American history.

It is repeating once again.

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Regards,

Charles Mizrahi
Prosperity Insider