Investors Abandon Enterprise Software As P/E Multiples Shrink

CNBC commentator Jim Cramer said Thursday that investors are fleeing enterprise software stocks, and it's too soon to call a bottom. He attributed the decline to fears that AI will disrupt software business models, which is compressing price-to-earnings multiples; ServiceNow plunged 9.9% Thursday and is down about 49% over the past year. Cramer said shrinking P/E ratios, not earnings, are driving the selloff.