Lots of European tech work is just offshoring/outsourcing for US companies. S174 affects them to an even higher degree since foreign software development has to be amortized not over 5 years, but over 15 years.
Section 174 has been covered many times on this site.
It could explain part of Europe's dumping. If the hiring market in the US is weak, some of those displaced devs could work for European software businesses, at least on a contractor basis, because remote is a thing. I've done that. I'm not doing it now (I'm globally unemployed, ha) but I did do it in the past. Was quite nice actually, the European company I worked with actually paid almost immediately when invoiced, rather than than drag it out 30-60 days as is customary in the US.
My company has drastically reduced its foreign outsourcing because of Section 174, and I've heard the same from others.
I don't think 174 is the entire story -- I do think interest rates play a significant part, for one thing. But it's definitely part of the story, and definitely plays into some level of Europe's tech woes.
I've heard about it a million times, but I also tend to follow tech-business things (folks on twitter, Stratechery, etc). Agree it doesn't explain Europe.
Plus, this doesn't really explain Europe's tech sector dumping, since from a quick search this is entirely an American thing.
So maybe you're just as wrong as anyone else?