From Intuit To Adobe To Salesforce, SaaS Stocks Stumble As AI Fears Trigger Selloff — Retail Eyes Selective Bets
Synopsis
Shares Expanded Tech-Software Sector ETF (IGV) fell 6.4% last week.
- Niche software and software-as-a-service firms declined last week, partly pressured by the launch of a new Claude AI tool from Anthropic.
- Intuit, Adobe, and Salesforce declined by over 10% last week.
- Investors and retail investors believe that, with valuations correcting, there is an opportunity for selective buying.
Investors were already rotating money out of niche software stocks into AI hardware and semiconductor plays as the year kicked off, when Anthropic’s latest AI tool launch intensified the sell-off.
Anthropic released Claude Cowork on Jan. 12; the powerful AI, capable of automating complex tasks such as turning screenshots into spreadsheets and detailed reports from an assortment of notes, reinforced the view that broad-based AI could make many legacy software products less necessary.
That led to wide declines in the stocks of notable companies: Intuit tumbled 16% last week, its worst performance since 2022, while Adobe and Salesforce fell more than 11%. For month-to-date declines, see the chart.
The iShares Expanded Tech-Software Sector ETF (IGV), a pure-play software sector fund, fell 6.4% last week, extending its month-to-date decline to 7%. It had gained 5.6% over 2025.
According to Bloomberg, earnings growth for S&P 500 software and services companies is projected to slow to 14% in 2026, down from an estimated 19% in 2025.
Investment research firms such as Barclays, Goldman Sachs, and DA Davidson have said that software stocks would be pressured this year after a strong showing in the last few years, although with valuations correcting, it's also a time to pick bets selectively, according to Bloomberg.
Of the names mentioned in the charts above, Adobe, Salesforce, and Workday had the lowest forward 12-month price-to-earnings ratios in the group (see chart).
| Company< | P/E< |
| Salesforce | 18 |
| Adobe | 12.6 |
| ServiceNow | 32.8 |
| Intuit | 23 |
| Atlassian | 23.4 |
| HubSpot | 28.2 |
| Datadog | 53.5 |
| Snowflake | 146 |
| Workday | 18.4 |
| Asana | 33 |
Source: Koyfin<
Retail investors appear to be mostly optimistic about the sector. On Stocktwits, nearly all of the stocks in the above list had an ‘extremely bullish’ sentiment, except Datadog (‘neutral’), Snowflake (‘bearish’), and Asana (‘bullish’).
For updates and corrections, email newsroom[at]stocktwits[dot]com.<
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