Softcat Shares Hits New 12-Month Low as Valuation Pressure Intensifies

Softcat's share price (LON:SCT) tumbled to a fresh 12-month low of 1,119.53 pence today, extending a painful decline that has seen the IT infrastructure and services provider lose 18% of its value year-to-date and 32% over the past 12 months.

The FTSE 250-listed stock continues to bear the brunt of a broader valuation reset across the technology sector, driven by mounting concerns over artificial intelligence developments and their impact on traditional IT service models.

Despite headwinds, Softcat has taken steps to signal confidence in its long-term prospects. Just last month (Jan 2026), the company announced a share buyback programme of up to £45 million, commencing on 8 January and expected to complete in the first half of the year. The initiative aligns with the Board's disciplined capital allocation policy and represents a tangible demonstration of management's belief in the company's underlying value.

Softcat has also moved strategically to position itself within the rapidly evolving AI landscape. In May 2025, the company acquired Oakland Group Services Ltd, a specialist in data strategy and AI, for £8 million. While the stock dipped 3.6% following the announcement, the acquisition is viewed as a calculated bet on high-margin AI and data services, potentially unlocking new profit avenues that could stabilize or reverse declining return on equity metrics.

Giving bears further fuel, insider selling activity has continued. In December 2025, CEO Graham Charlton and Chairman Graeme Watt sold significant stakes at prices around 1,456 pence and 1,429 pence respectively. Over a three-month period, insiders offloaded 46,069 shares valued at approximately £66.26 million, while purchasing just 47 shares. Insiders now hold 2.87% of the company, a figure that may unsettle markets already questioning management's conviction.

Softcat's current predicament reflects a confluence of valuation concerns, strategic repositioning, and broader technology sector anxieties. While the share buyback and AI-focused acquisition signal proactive management, markets remain unconvinced that these measures can offset near-term earnings risks and the structural challenges posed by evolving customer spending patterns in IT infrastructure.

With the completion of the current buyback program failing to provide much support for shares during this downturn, markets are likely looking at which levels may hold in the sessions to come.