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Just For You 3 Stocks to Avoid as Software Sector StumblesBy Dan Schmidt. First Published: 1/17/2026. 
Article Highlights - 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, big software companies received more bad news this week from "Claude Code," the new agentic coding tool for Anthropic's Claude Sonnet AI model. Claude Code launched last year, but a recent update has renewed pressure on several legacy software stocks. Is this selloff overdone, or are software names facing 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 early AI tools that generated snippets of code for specific tasks (for example, bug fixes), Claude Code provides a fully autonomous command-line system. This approach lets developers integrate entire workflows into the AI—writing, testing and debugging with minimal human intervention. Rather than acting as a personal assistant or editor, Claude Code's agents can oversee end-to-end tasks, executing high-level designs for full software stacks. 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 example from a Google engineer illustrates why Claude Code has worried Software as a Service (SaaS) companies. Earlier this month, Gemini API developer Jaana Dogan went viral after saying Claude Code recreated about a year's worth of her team's work in roughly one hour. If a year of work can be compressed into a single hour, that threatens SaaS firms that derive much of their revenue from annual licenses. Analysts at Oppenheimer cited this risk in their downgrade of creative-design giant Adobe Inc. (NASDAQ: ADBE), arguing that advances in these tools could turn software companies from beneficiaries of AI into its victims. 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 under pressure. The three names 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, long known for its customer relationship management platform. Salesforce offers a broad suite of cloud-based business tools and has historically depended on significant revenue from enterprise licensing. But if a relatively small number of AI agents can handle the work previously performed by hundreds of human reps, Salesforce risks losing a large portion of that high-margin license revenue. The company has also spent decades building a complex cloud ecosystem that many modern businesses view as cumbersome, inefficient and expensive. 
CRM shares staged a brief rally in December, briefly 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 fell 7% in a single session, dropping back below both the 50-day and 200-day SMAs amid heavy selling. A bearish crossover appears to be forming on the moving average convergence divergence (MACD) indicator, suggesting the selling pressure may persist. DocuSign: A Middleman at Risk of Being Cut Out DocuSign Inc. (NASDAQ: DOCU) was a major beneficiary of the work-from-home shift that began during the COVID-19 pandemic. At its peak, DOCU shares traded at meme-stock velocity, pushing the company's valuation to very high levels. But the momentum faded as interest rates rose, and DocuSign now faces renewed risks of obsolescence. DocuSign's struggles began when e-signature capabilities were bundled into larger platforms like Microsoft 365. Now, Intelligent Agreement Management (IAM) offerings could be bypassed entirely as AI agents become more customized and enterprises negotiate and automate agreements inside their own software ecosystems. 
DOCU shares recently hit a new 52-week low and continue to face strong resistance around the 50-day SMA. The Relative Strength Index (RSI) is near oversold levels, and selling volume appears to be ramping up—hardly a bullish setup for contrarian buyers. Atlassian: Potential Obsolescence From Autonomous Workflows Atlassian Corp plc (NASDAQ: TEAM) is the Australian-founded SaaS company behind popular workflow tools such as Jira, Confluence, Trello and Bitbucket. If you collaborate on projects, you've likely used one or more of these platforms. Although Atlassian has been integrating AI across its suite, it faces the risk that autonomous agents like Claude Code could centralize or replace workflows that these standalone tools currently handle. 
TEAM shares were rejected at the 50-day SMA and have fallen seven of the last ten sessions, losing more than 15% in that span. A bearish MACD crossover confirms the latest leg down, and the stock risks erasing more than two years' worth of gains if the trend continues—which, given current indicators, appears possible.
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