Everything on Sector Risk

The software sector is experiencing a valuation reset due to AI disruption, with significant exposure in private credit. This creates a contagion risk that extends beyond public equities to private markets.

Impact: Private credit funds face potential losses from SaaS defaults, requiring careful covenant monitoring and diversification away from high-risk tech exposures.

— from Market Unwind: Crowding, AI CapEx, and Credit Stress · Odd Lots· Feb 06, 2026