Shares of French software giant Dassault Systèmes experienced a dramatic nosedive, plummeting as much as 21% in early trading on Wednesday. This significant decline placed the stock on track for its worst trading day on record, with Paris-listed shares hovering around 20% lower by mid-morning in London. Trading in the stock was temporarily halted at the market’s open due to the volatility.
The sharp sell-off followed the release of Dassault Systèmes’ fourth-quarter earnings, which revealed a 5% dip in software revenue for the final three months of the previous year. For the full fiscal year, total revenue remained flat, falling short of analyst expectations at €6.24 billion (approximately $7.43 billion). Software revenue also demonstrated sluggish growth, reaching €5.64 billion. Analysts, according to LSEG data, had anticipated total revenues to reach €6.3 billion.
Despite the disappointing financial results, CEO Pascal Daloz articulated a forward-looking vision, stating in a press release that Dassault Systèmes is poised to “lead the Industrial AI transformation” through its industrial AI offering, 3D UNIV+RSES. He emphasized that this is not a short-term objective but a “long-term commitment to redefine how industries innovate, operate, and compete.” Daloz added that the company’s focus for 2025 and 2026 will be on “disciplined execution, aligning resources around our strategic priorities to deliver measurable, industry-defining impact.”
The downturn for Dassault Systèmes comes amidst broader market anxieties surrounding the software-as-a-service (SaaS) sector, particularly in light of advancements in artificial intelligence. Last week, the emergence of new AI tools from companies like Anthropic triggered a sell-off in SaaS and data provider stocks, with Dassault Systèmes itself shedding over 4% of its market value.
Aoifinn Devitt, senior investment advisor at Moneta, characterized the significant drop in Dassault Systèmes’ shares as a continuation of the so-called “SaaS apocalypse” trend. “There is really a concern right now around some of those winners that led the charge last year,” Devitt commented during an appearance on CNBC’s “Squawk Box Europe,” highlighting a general market skepticism towards previously high-flying software stocks. This sentiment underscores the sector’s sensitivity to evolving technological landscapes and investor perceptions of future growth potential in the age of AI.
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