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Exclusive Story 3 Stocks to Avoid as Software Sector StumblesWritten by Dan Schmidt. Posted: 1/17/2026. 
What You Need to Know - 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 rivaling the finale of Game of Thrones, and we're still only halfway through January. Many stocks in the industry have been in extended drawdowns since early 2025, and large software companies took another hit this week from "Claude Code," the agentic coding tool for Anthropic's Claude Sonnet AI bot. Claude Code was launched last year, but a recent update amplified pressure on several legacy software names. 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 hands-off design. Unlike earlier AI agents that produced code snippets for specific tasks (for example, bug fixes), Claude Code provides a fully autonomous command-line system. This approach lets developers integrate their workflows into the AI for writing, testing, and debugging. Rather than serving as a personal assistant or editor, Claude Code's agents can oversee entire tasks from start to finish, executing high-level design of software stacks with minimal human oversight. 3:38 PM
You might think a 93 percent win rate sounds impossible. In traditional trading, you'd be right. But this team uses a data-driven protocol that waits for the price to come to them. In this week's sessions, you'll see the public trade record: 2,495 trades, 2,341 wins, 154 losses. That's a verified 93.83 percent win rate. If you're tired of guessing on meme coins and losing money even when you call the trend correctly, this workshop shows you how to treat crypto like a business. Every attendee receives $10 in Bitcoin and a free trade setup. Reserve your seat and see the strategy behind the numbers. A recent example from a Google engineer illustrates why Software as a Service (SaaS) providers are uneasy. 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 just one hour. If a year's work can be compressed into a single hour, that's a nightmare for SaaS firms that earn a large share of revenue from annual licenses. Analysts at Oppenheimer flagged this risk in their downgrade of creative-design giant Adobe Inc. (NASDAQ: ADBE) earlier this week, arguing that software may be shifting from an AI beneficiary to an AI victim as these tools improve. 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 name under pressure. The three stocks below face material headwinds from the expanding role of AI in workplace 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 long relied on significant revenue from licensing its platform to large enterprises. But if a small number of AI agents can perform the work of many human reps, Salesforce could see a material portion of that high-margin licensing revenue disappear. Compounding the risk, the company spent more than two decades building a complex cloud ecosystem that many modern businesses now 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 about 7% in a single session, falling 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 that the selling pressure may not ease soon. DocuSign: A Middle Man at Risk of Being Cut Out DocuSign Inc. (NASDAQ: DOCU) benefited greatly from the work-from-home shift early in the pandemic. At the height of COVID-19, DOCU shares reached meme-stock velocity, trading above $300 per share and inflating the company's valuation. But like many COVID-era momentum names, DocuSign's run ended as the Fed tightened monetary policy, and the company increasingly faces obsolescence risk. DocuSign's challenges began when e-signature capabilities started to be bundled into larger platforms such as Microsoft 365. Meanwhile, the company's Intelligent Agreement Management (IAM) offering could be bypassed as AI agents become more customized and enterprises handle negotiations inside their own software ecosystems. 
DOCU shares recently hit a new 52-week low and face strong resistance at the 50-day SMA. Investors searching for bullish signs aren't finding much on this chart: the Relative Strength Index (RSI) remains near the oversold threshold of 30, and selling volume has started to pick up. Atlassian: Potential Obsolescence From Autonomous Workflows Atlassian Corp plc (NASDAQ: TEAM) is the Australian SaaS company behind popular workflow tools such as Jira, Confluence, Trello, Bitbucket, Loom, and Slack. If you collaborate on projects, you've likely used one or more of these tools in recent years. Although Atlassian has been integrating AI across its product suite, it still faces the risk that some of its standalone platforms become redundant as agents like Claude Code make it easier to centrally orchestrate workflows. The loss of relevance for any key product could meaningfully damage the company's revenue. 
TEAM shares were rejected at the 50-day SMA and have now fallen in seven of the last 10 trading sessions, losing more than 15% over that span. A bearish MACD crossover confirms the latest leg of the downtrend, raising the risk that the stock could erase more than two years' worth of gains if the slide continues.
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