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Further Reading from MarketBeat.com 3 Stocks to Avoid as Software Sector StumblesAuthored by Dan Schmidt. Date Posted: 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 that rivals the finale of Game of Thrones, and we're still only halfway through January. While many names have been suffering extended drawdowns since early 2025, large software companies received fresh pressure this week from "Claude Code," the new agentic coding tool for Anthropic's Claude Sonnet AI bot. Claude Code was introduced last year, but a recent update has renewed selling in many 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 rattling the tech sector because of its fully autonomous design. Unlike earlier AI agents that produced code snippets for specific tasks (for example, bug fixes), Claude Code provides a command-line system that can run end-to-end. Developers can integrate workflows into the tool for writing, testing, and debugging, and the agent can supervise entire tasks from high-level design through execution with minimal human oversight. 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 helps explain the fear gripping Software as a Service (SaaS) companies. Earlier this month, Gemini API developer Jaana Dogan went viral after saying Claude Code recreated a year's worth of her team's work in roughly an hour. If a year of work can be compressed into a single hour, that poses a nightmare scenario for SaaS firms that rely heavily on annual license revenue. Analysts at Oppenheimer referenced this dynamic in their downgrade of creative-design giant Adobe Inc. (NASDAQ: ADBE) earlier this week, suggesting software has shifted from being an AI beneficiary to a potential 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 all face meaningful headwinds from the expanding role of AI in workplace productivity. Salesforce: Agentic AI Risks Cannibalizing Key Business Salesforce Inc. (NYSE: CRM) is the original modern SaaS company and remains a leader in customer relationship management. The company offers a broad suite of cloud-based business platforms and has historically relied on substantial revenue from licensing its platform to large enterprises. If a relatively small number of AI agents can replicate the work of hundreds of human reps, Salesforce risks losing a large portion of that high-margin license revenue. Compounding the problem, the company has spent decades building a complex cloud ecosystem that some businesses now view as cumbersome, inefficient, and expensive. 
CRM shares staged a brief rally in December, moving 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 dropped 7% in a single session, slipping 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 this selling pressure may persist. DocuSign: A Middleman at Risk of Being Cut Out DocuSign Inc. (NASDAQ: DOCU) benefited greatly from the work-from-home surge when COVID-19 first hit. At its peak, DOCU shares traded over $300, pushing the company's valuation to lofty levels. But as rates rose and competition intensified, DocuSign's momentum faded, and the company now faces the risk of obsolescence. DocuSign's troubles began as e-signature capabilities were bundled into larger platforms like Microsoft 365. Now, Intelligent Agreement Management (IAM) could be bypassed as AI agents become more capable and enterprises choose to negotiate and automate agreements within their own systems. 
DOCU shares recently hit a new 52-week low and continue to face strong resistance at the 50-day SMA. Technicals offer little comfort: 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 widely used workflow tools such as Jira, Confluence, Trello, Bitbucket and Loom. If you collaborate on projects, you've likely used one or more of these tools recently. Although Atlassian has been integrating AI into its products, it still risks some platforms becoming redundant as agents like Claude Code make it easier to centrally orchestrate workflows. 
TEAM shares were rejected at the 50-day SMA and have now fallen seven of the last 10 trading days, losing more than 15% in the process. A bearish MACD crossover confirms the latest leg of the downtrend, and the stock risks wiping out more than two years' worth of gains if the selloff continues.
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