Market participants increasingly appear to favor businesses supplying chips, data centers and AI computing capacity over established subscription-software providers.
- Adobe shares fell to a seven-year low on Thursday despite reporting a 13% jump in Q1 revenue of $6.62 billion.
- Salesforce shares fell to a three-year low of $163.31 as investors reacted to AI-driven workforce reductions.
- The Trade Desk shares extended their decline as investors remain concerned about slowing growth and significant executive turnover.
Adobe (ADBE), Salesforce (CRM), and The Trade Desk (TTD) stocks slumped to new 52-week lows on Thursday as investors continued to pull money from traditional software businesses and redirect capital toward companies building artificial intelligence infrastructure.
Investors are questioning whether generative AI will strengthen the competitive positions of legacy software companies or weaken their pricing power by making existing products easier to replace.
Adobe Stock tumbled over 6%, while Salesforce and The Trade Desk stocks fell over 2% each.
ADBE Faces Leadership And Competitive Pressures
Adobe came under heavy selling pressure on Thursday, pushing the stock to a seven-year low of $218.1.
Though the company reported record quarterly revenue of $6.62 billion, representing a 13% increase from a year earlier. The company also posted adjusted earnings per share (EPS) of $5.95 and raised its full-year forecast. Both revenue and EPS beta Street estimates of $6.45 billion and $5.81, according to Fiscal AI data.
Even so, investors remained focused on broader questions about whether generative AI tools could weaken the long-term value of premium software subscriptions.
Another issue weighing on sentiment was the planned departure of CFO Dan Durn. The leadership shift added another layer of uncertainty during an already challenging period for software stocks. In March, Adobe’s CEO, Shantanu Narayen, had also said he plans to step down once a successor is chosen.
However, on Stocktwits, retail sentiment around the stock improved to ‘extremely bullish’ from ‘bullish’ territory the previous day.
CRM Suffers AI Automation Risks, Workforce Reductions
Salesforce extended its recent decline on Thursday, with shares falling to a three-year low of $163.31 as investors weighed the implications of AI-driven automation, workforce reductions and changes to the company’s long-standing revenue model.
The recent decline came after reports that Salesforce was undertaking further restructuring, including layoffs across several parts of the business. According to a Business Insider report published Tuesday, the job cuts affected employees working on the company's Agentforce AI platform, MuleSoft software, and Marketing Cloud products.
The decline also coincided with Salesforce’s acquisition of billing software provider m3ter on Monday, a move viewed as part of a broader effort to adapt its pricing strategy for an AI-driven market.
Retail sentiment around the stock remained in ‘bearish’ territory.
TTD Confronts Growth Concerns
Shares of The Trade Desk (TTD) fell to a six-year low of $18.37 on Thursday, extending a prolonged decline that has erased nearly 74% of the digital advertising company's market value over the past year.
Investor concerns have increasingly centered on slowing business momentum, leadership instability and intensifying competition in the online advertising market.
Fiscal Q1 revenue expansion moderated into the low double digits, while the company’s Q2 revenue outlook of $750 million fell short of analyst expectations of $770.41 million, according to Fiscal AI data.
Over the past year, the company experienced significant leadership turnover, including the departures of marketing chief Ian Colley, revenue chief Anders Mortensen, and at least three CFOs.
Retail sentiment around the stock remained in ‘bullish’ territory.
So far this year, while TTD stock plunged 50%, ADBE and CRM stocks slumped over 37% each.
For updates and corrections, email newsroom[at]stocktwits[dot]com.<
