Buffett once said if you saw cars coming in 1905, you should’ve shorted horses, not picked automakers.
Private credit in 2021-2022 decided to go long horses. Specifically, enterprise software at peak valuations funded with floating rate loans. pic.twitter.com/DY3dqVYS24
— junkbondinvestor (@junkbondinvest) February 5, 2026
U.S. hedge funds have cut software stocks’ share of net exposure to just 4%, the lowest level on record.
— Special Situations 🌐 Research Newsletter (Jay) (@SpecialSitsNews) February 5, 2026
Software Stocks absolutely falling off a cliff
byu/RobertBartus inEconomyCharts
Blue Owl tried to calm the “software credit” nerves by pointing out it’s 8% of AUM — and the broader picture helps: Q4 AUM just topped $300B and they raised $17.3B of new capital, even with the sector selloff.
— Kai – Briefing Block (@briefing_block_) February 5, 2026