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Today's Featured Content 3 Stocks to Avoid as Software Sector StumblesWritten by 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 selling pressure this month that would make the finale of Game of Thrones look mild, and we’re still only halfway through January. Many names have been in extended drawdowns since early 2025, and this week brought fresh pain to large software companies after an update to ‘Claude Code,’ the agentic coding tool for Anthropic’s Claude Sonnet AI bot. Claude Code was introduced last year, but this month’s update intensified concerns at several legacy software firms. 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 autonomous design. While early AI agents produced snippets of code for specific tasks (for example, bug fixes), Claude Code operates as an agentic, command-line system that can write, test, and debug with minimal human intervention. Rather than functioning as an assistant or editor, Claude Code’s agents can manage an entire task from high-level design through execution, enabling developers to integrate whole workflows into the tool. For the first time ever, James Altucher – one of America's top venture capitalists – is sharing how ANYONE can get a pre-IPO stake in SpaceX… with as little as $100! [[Click here now to view.]] A viral post from a Google engineer illustrates why this is worrying for Software as a Service (SaaS) businesses. Earlier this month, Gemini API developer Jaana Dogan claimed Claude Code reproduced about a year’s worth of her team’s work in roughly an hour. If a year’s work can be compressed into a single hour, it threatens SaaS firms that rely heavily on annual license revenue. Analysts at Oppenheimer flagged this risk in their downgrade of creative software leader Adobe Inc. (NASDAQ: ADBE), saying software may be 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 under pressure. The three names below 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 enterprise SaaS company, best known for its market-leading Customer Relationship Management platform. Salesforce historically relied on substantial revenue from licensing its platform to large customers. If a small number of AI agents can replace the work of hundreds of human reps, Salesforce risks losing a significant portion of that high-margin license revenue. The company has spent decades building a complex cloud ecosystem that some customers now view as cumbersome and costly. 
CRM shares staged a brief rally in December, briefly 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 plunged about 7% in a single session, slipping below the 50- and 200-day SMAs amid broad selling pressure. A bearish crossover appears to be forming on the moving average convergence divergence (MACD) indicator, suggesting the downtrend may persist. DocuSign: A Middle Man at Risk of Being Cut Out DocuSign Inc. (NASDAQ: DOCU) benefited from the work-from-home shift during the COVID-19 pandemic. At the peak of that run, DOCU shares surpassed $300, pushing the company’s market value to lofty levels. But like many COVID-era momentum names, DocuSign has cooled as interest rates rose and competitive dynamics shifted. DocuSign’s troubles began when e-signature capabilities started getting bundled into larger platforms such as Microsoft 365. Now, Intelligent Agreement Management (IAM) could be circumvented entirely as AI agents become more tailored and enterprises opt to negotiate and manage agreements within their own software ecosystems. 
DOCU shares recently hit a new 52-week low and continue to face resistance near the 50-day SMA. The Relative Strength Index (RSI) is trading below 30, indicating oversold conditions, and selling volume is beginning to climb. Atlassian: Potential Obsolescence From Autonomous Workflows Atlassian Corp plc (NASDAQ: TEAM) is the Australian software company behind widely used collaboration and workflow tools such as Jira, Confluence, Trello, Bitbucket, Loom, and Slack. Many teams rely on one or more of these products. Although Atlassian has been actively integrating AI into its portfolio, some of its standalone platforms could become less essential if agents like Claude Code enable centralized, autonomous workflow integration. The diminished relevance of any single product could materially affect the company’s revenue mix. 
TEAM shares were rejected at the 50-day SMA and have fallen seven of the last 10 trading days, losing more than 15% in that span. A bearish MACD crossover confirms the recent leg of the downtrend, and the stock risks erasing more than two years’ worth of gains if this pressure continues, which appears likely.
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