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Special Report 3 Stocks to Avoid as Software Sector StumblesSubmitted by Dan Schmidt. Published: 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 fresh pain this week 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 inflicted another round of selling on 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 rattling the tech sector because of its fully hands-off design. Unlike early AI agents that produced short snippets of code for specific tasks (for example, bug fixes), Claude Code offers a fully autonomous command-line system. It allows developers to integrate workflows into a single AI tool that writes, tests, and debugs code. Instead of acting as a personal assistant or editor, Claude Code’s agents can oversee entire projects from start to finish, designing and implementing software stacks with minimal human oversight. Do NOT buy gold until you see this
A major announcement from President Trump could send certain gold stocks soaring 10x… 20x… even 50x higher in the blink of an eye. Get the details here. A recent example from a Google engineer helps explain why Claude Code has SaaS companies on edge. Earlier this month, Gemini API developer Jaana Dogan went viral after claiming Claude Code reproduced a year’s worth of her team’s work in roughly one hour. If a year’s work can be reduced to a single hour, that presents a nightmare scenario for SaaS firms that derive substantial revenue from annual licenses. Analysts at Oppenheimer reflected this concern in their downgrade of creative-design giant Adobe Inc. (NASDAQ: ADBE) earlier this week, noting that software is shifting from an AI beneficiary to an AI victim as these tools advance. 3 Software Stocks to Avoid as Sector-Wide Panic Ensues Adobe shares are down more than 25% over the past 12 months, but it isn’t the only software stock in trouble. The following three names face serious 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 company, having gone public early enough to secure the coveted Customer Relationship Management (CRM) ticker. Salesforce offers a broad suite of cloud-based business platforms and has historically relied on substantial revenue from licensing its platform to large enterprises. If 10 AI agents can now do the work of several hundred human reps, Salesforce could lose a meaningful portion of that high-margin license revenue. Moreover, the company has 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, trading 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 fell 7% in a single session, slipping below the 50-day and 200-day SMAs amid a wave of selling. A bearish crossover appears to be forming on the moving average convergence divergence (MACD) indicator, suggesting this selling pressure may persist. DocuSign: A Middle Man at Risk of Being Cut Out DocuSign Inc. (NASDAQ: DOCU) was a major beneficiary of the work-from-home revolution after COVID-19. At its peak, DOCU shares traded above $300 and the stock enjoyed a sky-high valuation. But like many COVID-era favorites, the rally faded as the Fed tightened policy, and DocuSign now faces the risk of obsolescence. DocuSign’s struggles began when e-signature functionality started getting bundled into larger platforms like Microsoft 365. In addition, the company’s Intelligent Agreement Management (IAM) could be bypassed entirely as AI agents become more customizable and enterprises choose to negotiate within their own software environments. 
DOCU shares recently hit a new 52-week low and continue to face strong resistance at the 50-day SMA. Investors looking for a technical respite aren’t finding much: the Relative Strength Index (RSI) remains in oversold territory below 30, and selling volume is beginning to ramp up. Atlassian: Potential Obsolescence From Autonomous Workflows Atlassian Corp plc (NASDAQ: TEAM) is the Australian SaaS firm behind popular workflow tools like Jira, Confluence, Trello, and Bitbucket. If you collaborate on projects, you’ve likely used one or more of these platforms in recent years. While Atlassian has been integrating AI across its product suite, it risks some platforms becoming redundant as agents like Claude Code make central integration of workflows easier. Atlassian licenses several standalone tools, and the irrelevance of any one of them could materially hurt the company’s bottom line. 
TEAM shares were rejected at the 50-day SMA and have fallen in seven of the last 10 trading sessions, losing more than 15% in the process. A bearish MACD crossover confirms the latest leg of the downtrend, and the stock risks erasing more than two years’ worth of gains if the decline continues — which appears to be the likely outcome.
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