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Bonus Content from MarketBeat 3 Stocks to Avoid as Software Sector StumblesReported by Dan Schmidt. Date Posted: 1/17/2026. 
At a Glance - Software stocks have struggled over the last few months, especially those in the Software-as-a-Service (SaaS) industry.
- SaaS firms face substantial disruption from AI agents like Claude Code, which can automate entire workflows and eliminate the need for expensive software licenses.
- Salesforce, DocuSign, and Atlassian could be three industry stocks at risk of losing revenue to new AI tools.
The software sector has already seen more carnage this month than the finale of Game of Thrones, and we’re still only halfway through January. While many stocks in this industry have been suffering extended drawdowns since early 2025, large software companies received even more bad news this week from ‘Claude Code’, the new agentic coding tool for Anthropic’s Claude Sonnet AI bot. Claude Code was launched last year, but a recent update sent another wave of pain across several legacy software names. Is this selloff overdone, or are software stocks staring down a prolonged bear market? Why ‘Claude Code’ Has the Software Sector Spooked Claude Code is sending shockwaves through the tech sector because of its fully hands-off design. Unlike earlier AI tools that wrote snippets of code for specific tasks (for example, bug fixes), Claude Code offers an autonomous command-line system that developers can integrate into their workflows for writing, testing, and debugging. Instead of acting as a personal assistant or editor, Claude Code’s agents can oversee an entire task from start to finish, executing the high-level design of complete software stacks with minimal human oversight. While President Trump's official salary is $400,000 per year... his tax returns reveal he's been collecting up to $250,000 PER MONTH from one hidden source. Until recently, most Americans couldn't touch the type of investment that makes up this investment. But thanks to Executive Order 14330, that just changed. If you love investing in disruptive new companies... Discover how to invest in the fund Trump uses to collect this income >> A recent anecdote from a Google engineer highlights why Claude Code has unnerved many Software as a Service (SaaS) companies. Earlier this month, Gemini API developer Jaana Dogan went viral after claiming Claude Code recreated a year’s worth of her team’s work in just one hour. If a year’s worth of effort can be compressed into a single hour, that poses a nightmare scenario for SaaS firms that earn a large portion of revenue from annual licenses. Analysts at Oppenheimer noted this in their downgrade of creative design giant Adobe Inc. (NASDAQ: ADBE) earlier this week, saying software has shifted from being an AI beneficiary to being threatened by AI advances. 3 Software Stocks to Avoid as Sector-Wide Panic Ensues Adobe shares are down more than 25% in the last 12 months, but it isn’t the only software stock in trouble. The three companies below all face meaningful headwinds from the expanding role of AI in workflow productivity. Salesforce: Agentic AI Risks Cannibalizing Key Business Salesforce Inc. (NYSE: CRM) is the original SaaS giant, having gone public early enough to secure the prized CRM ticker. Salesforce offers a broad suite of cloud-based business platforms and traditionally relied on substantial revenue from licensing its platform to large enterprises. If multiple AI agents can now perform the work of hundreds of human representatives, Salesforce risks losing a significant portion of that high-margin license revenue. Compounding the problem, the company has spent more than 20 years building a complex cloud ecosystem that many businesses increasingly view as cumbersome, inefficient, and expensive. 
CRM shares staged a brief rally in December, breaking above the 50-day and 200-day simple moving averages (SMAs) before Adobe’s downgrade and the latest Claude Code update hit the market. On Jan. 13, CRM plunged about 7% in a single session, falling below the 50-day and 200-day SMAs amid renewed selling pressure. A bearish crossover appears to be forming on the moving average convergence divergence (MACD) indicator, suggesting that downside pressure may persist. DocuSign: A Middleman at Risk of Being Cut Out DocuSign Inc. (NASDAQ: DOCU) benefited heavily from the work-from-home shift during the COVID-19 pandemic. At the peak of that frenzy, DOCU shares traded above $300 and the company’s valuation swelled dramatically. But like many COVID-era highfliers, DocuSign cooled as interest rates rose, and it now faces a renewed risk of obsolescence. DocuSign’s struggles began when e-signature functionality started to be bundled into larger platforms such as Microsoft 365. Additionally, the company’s Intelligent Agreement Management (IAM) could be bypassed entirely as AI agents become more customizable and businesses prefer to negotiate and automate agreements within their own enterprise systems. 
DOCU shares recently hit a new 52-week low and face stiff resistance near the 50-day SMA. Investors seeking optimism aren’t seeing much on the chart: the Relative Strength Index (RSI) remains in or near oversold territory (below 30), and selling volume has begun to accelerate. Atlassian: Potential Obsolescence From Autonomous Workflows Atlassian Corp plc (NASDAQ: TEAM) is the Australian SaaS firm behind widely used workflow tools such as Jira, Confluence, Trello and Bitbucket, among others. If you collaborate on projects, you’ve likely used one or more of these platforms recently. Even though Atlassian has been integrating AI into its products, parts of its portfolio could become redundant as agents like Claude Code make it easier to centrally orchestrate and automate workflows. Atlassian licenses several standalone platforms, and the diminished relevance of any one could materially affect the company’s results. 
TEAM shares were rejected at the 50-day SMA and have fallen in seven of the last 10 trading sessions, losing more than 15% over that span. A bearish MACD crossover confirms the latest leg of the downtrend, and if it continues the stock could erase more than two years’ worth of gains.
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