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Additional Reading from MarketBeat Media 3 Stocks to Avoid as Software Sector StumblesAuthor: Dan Schmidt. First Published: 1/17/2026. 
Summary - 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 worthy of a TV finale, 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 took another hit this week from ‘Claude Code’, the agentic coding tool for Anthropic’s Claude Sonnet AI. Claude Code was introduced last year, but a new update this month renewed pressure on several legacy software names. Is this selloff overdone, or are software stocks facing a prolonged downturn? Why ‘Claude Code’ Has the Software Sector Spooked Claude Code is rattling the tech sector because of its hands-off, end-to-end approach. Unlike earlier AI tools that produced snippets for specific tasks (for example, bug fixes), Claude Code provides a fully autonomous, command-line system. Developers can integrate whole workflows into the tool for writing, testing, and debugging. Rather than acting as an assistant or editor, Claude Code’s agents can oversee entire tasks from conception to execution, performing high-level design and building complete software stacks with minimal human oversight. If your retirement strategy involves "picking the right stocks," you're one crash away from disaster…
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And his followers have seen an 84%-win rate. Click here to see how he does it A recent anecdote from a Google engineer helps explain why Software as a Service (SaaS) companies are alarmed. 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 output can be condensed into a single hour, that poses a serious threat to SaaS firms that derive a large share of revenue from annual licenses. Analysts at Oppenheimer emphasized this point in their downgrade of creative-design leader Adobe Inc. (NASDAQ: ADBE) earlier this week, arguing that advances in these tools can flip software from an AI beneficiary into an AI victim. 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 under pressure. The three names below face meaningful headwinds as AI increasingly displaces traditional workflow and licensing models. Salesforce: Agentic AI Risks Cannibalizing Key Business Salesforce Inc. (NYSE: CRM) is the original enterprise SaaS company and the firm behind the CRM ticker. It offers a broad suite of cloud-based business platforms and has long relied heavily on license revenue from large enterprises. If a relatively small number of AI agents can replace the work of hundreds of human reps, Salesforce could see a meaningful portion of that high-margin license revenue evaporate. Compounding the risk, the company has spent more than two decades building a complex cloud ecosystem that many modern businesses view as cumbersome and costly. 
CRM shares staged a brief rally in December, breaking above the 50-day and 200-day simple moving averages (SMAs) before news of Adobe’s downgrade and the latest Claude Code update hit the market. On Jan. 13, CRM dropped 7% in a single session, slipping below both the 50- and 200-day SMAs amid increased selling. A bearish crossover appears to be forming on the moving average convergence divergence (MACD) indicator, suggesting the selling pressure could persist. DocuSign: A Middle Man at Risk of Being Cut Out DocuSign Inc. (NASDAQ: DOCU) benefited greatly from the work-from-home shift during the COVID-19 pandemic. At its peak, DOCU traded like a meme stock, with prices topping $300 per share and valuation metrics that far outpaced fundamentals. But the rally cooled as the Fed raised rates, and DocuSign now faces real obsolescence risks. Struggles began when e-signature functionality started being bundled into larger platforms like Microsoft 365. Further, the company’s Intelligent Agreement Management (IAM) offering could be bypassed entirely as AI agents become more capable and enterprises prefer to negotiate and manage agreements inside their own systems. 
DOCU shares recently hit a new 52-week low and continue to face resistance at the 50-day SMA. Investors aren’t finding much comfort in the technicals: the Relative Strength Index (RSI) sits near the traditional oversold threshold of 30, and selling volume has begun to ramp up. Atlassian: Potential Obsolescence From Autonomous Workflows Atlassian Corp plc (NASDAQ: TEAM) is the Australian SaaS company behind Jira, Confluence, Trello, Bitbucket, Loom, and Slack. If you collaborate on projects, you’ve likely used one or more of these tools recently. Although Atlassian has been integrating AI across its products, it faces the risk that some standalone platforms will become redundant as agentic systems like Claude Code make it easier to centrally coordinate workflows. Losing relevance for any one of its licensed platforms could materially hurt the company’s revenue. 
TEAM shares were rejected at the 50-day SMA and have been down seven of the last 10 trading days, losing more than 15% in that span. A bearish MACD crossover confirms the current downtrend, and the stock risks erasing more than two years’ worth of gains if the slide continues.
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