AI Revenue Surge Drags Down Rapid7, ServiceNow, Monday.com

Shares of Rapid7, ServiceNow, and monday.com dropped sharply after Bloomberg reported that AI startup Anthropic pulled in more than $11.5 billion in revenue during the second quarter, a figure that rattled investors betting on legacy software platforms. The sell-off reflects a growing conviction on Wall Street that enterprise clients are actively shifting budget dollars away from conventional software subscriptions and toward AI-native tools.

The market reaction underscores a fear that has haunted software sector bulls for months: that artificial intelligence won't merely augment existing platforms but will cannibalize the recurring revenue streams that made these companies so valuable in the first place. Investors reacted by repricing risk across non-AI software names, questioning whether current valuations adequately account for that structural threat.

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Monday.com faces a particularly tough backdrop. The project-management platform was already deeply underwater on a year-to-date basis and trading well below its 52-week high even before Thursday's decline — meaning the AI-driven rotation compounds losses that had already eroded significant shareholder value. ServiceNow and Rapid7, which serve IT workflow and cybersecurity markets respectively, also found little shelter from the broader repositioning.

The timing is notable. The broader market had staged a recovery fueled by easing geopolitical tensions and a wave of AI-related merger and acquisition activity, giving software stocks a brief reprieve. Anthropic's blockbuster revenue report appears to have snapped that optimism, reminding traders that the AI buildout can simultaneously lift chip and infrastructure names while pressuring the software layer that sits above them.

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