Market Manipulation of Narratives

Since the beginning of the year, ghost stories about AI disrupting software stocks have emerged one after another. As market panic spread, IGV has been falling all the way. However, there seems to be a turning point recently. Several major banks (Deutsche Bank, HSBC) have released research reports to reconstruct the narrative, shifting the discussion from AI replacing software to AI expanding the boundaries of software. There are signs of a reversal in this narrative manipulation, which reminds me of the DeepSeek moment last year. Manipulating narratives through public opinion is an old trick on Wall Street. Let's first review the process of this round.

Step 1: Concept Surprise Attack

Coworker was released, directly challenging the business model foundation of SaaS seats.

Step 2: Emotional Contagion, Collective Punishment Across the Industry

Agent ghost stories targeted various sectors; whichever was targeted got hit, with indiscriminate selling across the board, including gaming, logistics, and cybersecurity.

Step 3: Panic and Disruption

Critini's short essay went viral, intensifying panic. However, this method of spreading emotions through exaggerated ghost stories rather than facts is usually a sign that the short side is running out of steam.

Step 4: Institutions Step In to Endorse

IGV has fallen to a low point. Research reports from major banks like Deutsche Bank and HSBC guide the narrative reconstruction, such as "Software won't be swallowed by AI; AI will integrate into software and expand TAM." Next, we'll see if IGV can stabilize and rebound.

Does the above storyline look very familiar? Last year, DeepSeek was the same, and the subsequent story is known to everyone.

$iShares Expanded Tech Software Sector ETF(IGV.US)

$Microsoft(MSFT.US)

$Palantir Tech(PLTR.US)