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Further Reading from MarketBeat Media 3 Stocks to Avoid as Software Sector StumblesAuthored by Dan Schmidt. Published: 1/17/2026. 
Quick Look - 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 rivaling the finale of Game of Thrones, and we're still only halfway through January. Many stocks in the industry have been suffering extended drawdowns since early 2025, and this week brought fresh pressure from "Claude Code," the agentic coding tool for Anthropic's Claude Sonnet AI bot. Claude Code launched last year, but a new update this month renewed selling pressure on several legacy software names. Is this selloff overdone, or are software stocks facing a prolonged bear market? Why 'Claude Code' Has the Software Sector Spooked Claude Code is rattling the tech sector because of its fully hands-off design. Unlike earlier AI tools that produced code snippets for specific tasks (for example, bug fixes), Claude Code provides a fully autonomous command-line system developers can integrate into end-to-end workflows for writing, testing, and debugging. Instead of acting as a personal assistant or editor, Claude Code agents can manage entire projects—from high-level design to implementation—with minimal human oversight. A freight train pulling 50 railcars can be worth $2 million in economic value. That's the idea behind a new trading concept called the Money Train Method. Imagine bumping your win rate from 50 percent up to 60, 75, or even 80 percent while increasing each trade's profit potential to an average gain of 20 to 30 percent, with triple-digit runners possible. The strategy also builds in downside protection with a reward-to-risk ratio of 1.2 to 1. See how the Money Train Method works. A recent anecdote from a Google engineer illustrates the concern for 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 about an hour. If a year's work can be compressed into a single hour, subscription-based SaaS firms that rely on annual licenses could see significant revenue pressure. Analysts at Oppenheimer highlighted this shift in their downgrade of creative-design giant Adobe Inc. (NASDAQ: ADBE) earlier this week, noting that some software companies risk being harmed by — rather than benefiting from — rapid AI advances. 3 Software Stocks to Avoid as Sector-Wide Panic Ensues Adobe shares are down more than 25% over the last 12 months, but it isn't the only software stock under pressure. The three stocks below face material headwinds as AI expands its role in workflow productivity. Salesforce: Agentic AI Risks Cannibalizing Key Business Salesforce Inc. (NYSE: CRM) is the original SaaS giant and the signature CRM name on Wall Street. The company provides a broad suite of cloud-based business platforms and has historically relied on high-margin licensing revenue from large enterprises. If a relatively small number of AI agents can replicate the work of hundreds of human reps, Salesforce stands to lose a meaningful portion of that recurring license revenue. The company has also spent more than 20 years building a complex cloud ecosystem that many modern businesses now view as cumbersome, inefficient, and expensive. 
CRM shares staged a brief rally in December, briefly clearing 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 7% in a single session, dropping below those SMAs amid heavy selling. A bearish signal is forming on the moving average convergence divergence (MACD) indicator, suggesting the selling pressure may continue. DocuSign: A Middle Man at Risk of Being Cut Out DocuSign Inc. (NASDAQ: DOCU) benefited enormously from the work-from-home shift that began during COVID-19. At its peak, DOCU shares traded above $300 per share and the company enjoyed a sky-high valuation. But that momentum faded as interest-rate pressures mounted, and DocuSign now faces the risk of becoming less relevant. DocuSign's challenges began as e-signature capabilities were bundled into larger platforms like Microsoft 365. Now, Intelligent Agreement Management (IAM) workflows could be bypassed entirely as AI agents become more customizable and clients opt to negotiate and automate agreements directly within their own enterprise systems. 
DOCU shares recently hit a new 52-week low and continue to face resistance at the 50-day SMA. The Relative Strength Index (RSI) remains in oversold territory (below 30), and selling volume is beginning to ramp up—hardly the setup investors want to see for a turnaround. Atlassian: Potential Obsolescence From Autonomous Workflows Atlassian Corp plc (NASDAQ: TEAM) is the Australian SaaS company behind widely used collaboration and workflow tools such as Jira, Confluence, Trello, and Bitbucket. If you collaborate on projects with others, you've likely used one or more of these tools recently. Although Atlassian has been integrating AI across its suite, it faces the risk that agentic systems like Claude Code could centralize workflows and make some standalone platforms redundant. Losing relevance for even one major product could materially hurt the company's financials. 
TEAM shares were rejected at the 50-day SMA and have fallen seven of the last 10 trading days, losing more than 15% in the process. A bearish MACD crossover reinforces the downtrend, and the stock risks erasing more than two years' worth of gains if the current momentum persists.
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