Deutsche Bank's (NYSE:DB) U.S. distressed products group brought in more than $100 million in profits in the first quarter of 2026 on short-selling software companies’ debts.

• Deutsche Bank stock is taking a breather. What’s next for DB stock?

Long positions in telecommunications firm Brightspeed and equity in Tronox Holdings, along with short positions in the debt of Xerox Holdings Corp (NASDAQ:XRX), also drove performance during the first quarter, Bloomberg reported.

The distressed trading desk also worked on a deal to provide a senior secured credit facility of up to $425 million for AMC Entertainment Holdings, Inc (NYSE:AMC) and its wholly owned subsidiary Odeon Finco Plc.

Last year, the U.S. distressed trading desk made about $200 million in profit during the three months ending Sept. 30, Bloomberg reported.

This comes as Software-as-a-service (SaaS) and data-provider stocks saw sharp declines in recent weeks amid market concerns that artificial intelligence will erode the relevance of the sector.

Some of the top private equity CEOs have addressed what many call the "SaaS apocalypse" as investors voice concerns about the stock slump.

Thoma Bravo's managing partner, Holden Spaht, believes AI is driving the next phase of innovation in software and sees this as a "compelling opportunity”. 

Meanwhile, Apollo Global Management's CEO Marc Rowan has called the investor reaction to software stocks "extreme."

Global investment firm Permira is seeking to acquire discounted software loans, focusing on broadly syndicated loans in the European secondary markets. The company is also considering expanding into the U.S., seeking software companies that have robust offerings and high market visibility. 

JPMorgan Chase & Co (NYSE:JPM) started restricting lending to loans associated with software companies in its private credit funds.

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