AI Disruption Is Reshaping Software - And Credit Markets May Be Next

As investors debate whether software stocks have bottomed and the Nasdaq can regain momentum, some market watchers warn the AI boom may not play out as Wall Street expects.

For Jordi Visser, head of AI Macro Nexus Research at 22V Research, the real story isn't about a rebound in the iShares Tech-Expanded Software Sector ETF (NYSE: IGV) or in the broader Nasdaq 100.

“This is not a cycle. This is a regime shift. This is going at light speed,” he said in his latest video on YouTube.

In his view, AI isn't just another growth driver — it's a deflationary force that can reshape corporate economics, credit markets and labor.

"We are entering a phase of multiple compression across anything related to software," Visser said in his weekly podcast.

In other words, the question isn't when growth stocks recover — it's whether the economics that supported them for the past decade still apply in a world where intelligence can be replicated instantly.

A Structural Shift, Not A Cycle

The core of Visser's thesis is that AI is accelerating competition so quickly that traditional long-duration valuation models are breaking down.

For more than a decade, software enjoyed asset-light economics, recurring revenue and long-duration growth assumptions. That era, he argues, is ending.

Why? Because AI collapses barriers to entry.

When code can be generated in seconds, customized on demand and improved autonomously, scarcity disappears — and without scarcity, long-duration valuation premiums can't hold.

He calls attempts to bottom-fish beaten-down SaaS names "playing the game of the prior decade."

In his framework, widening dispersion between winners and losers isn't noise — it's markets pricing radical uncertainty into future cash flows.

"In a world where software can be created in seconds, the old model breaks," he said.

Dispersion Signals Stress Beneath The Surface

One of the key indicators Visser highlights is the surge in equity dispersion.

“The S&P is flat year-to-date, yet 185 stocks have posted greater than 15% absolute moves in both directions, double the 81 names we saw on this same day last year,” he said.

“That level of dispersion has only been matched twice in 30 years: during the dot-com bust and the GFC,” he added.

According to Visser, those episodes of extreme dispersion have preceded wider credit spreads.

"Credit is the key signal to watch — that's where the next fear could emerge," he said.

Not A Bubble — But Potentially Deflationary

Visser's most controversial view may be this: AI is inherently deflationary.

As AI models improve and costs fall — particularly with the rise of lower-cost open-source alternatives — pricing power across parts of the software ecosystem could come under sustained pressure.

"This is incredibly deflationary once you reach intelligence-scale competition," he said.

The problem isn't innovation; it’s monetization.

And if revenue expectations miss while capex remains fixed, credit markets eventually react.

Private markets, software debt, and even hyperscaler capital expenditure plans could eventually feel second-order effects if revenue expectations are revised lower.

Volatility Likely To Persist

For now, Visser stops short of calling for a systemic crisis. Corporate earnings and macro growth remain relatively firm.

But he expects the transition to be turbulent.

"Expect persistent volatility — not systemic risk, but structural messiness," he said, adding that multiple sharp corrections remain possible even in a broadly sideways market.

The bigger message for investors: the AI era may reward a very different set of winners than the last decade.

"AI is a supersonic tsunami disrupting anything not based on scarcity," Visser said.

If he's right, the next phase of the market cycle may be defined less by broad index direction — and more by who adapts fastest to the new competitive reality.

“Physical infrastructure, commodities, industrials, and hardware are poised to become the structural winners of this new era,” he said.