Software Stocks Decline, Investors Eye Acquisition Opportunities
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 22 2026
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Source: Newsfilter
- Market Downward Pressure: Cloud software stocks like Salesforce, ServiceNow, and Adobe have dropped over 14% at the start of 2025, while the WisdomTree Cloud Computing Fund has fallen more than 8% year-to-date, indicating increasing market concerns about the software sector.
- Increased Acquisition Opportunities: Orlando Bravo, co-founder of private equity firm Thoma Bravo, noted that there are “incredible buying opportunities” right now, which may lead mid-sized software companies to seek financing and potentially trigger a wave of acquisitions.
- Escalating AI Threats: The launch of AI agent tools has heightened investor anxiety about the software industry's future, with analysts highlighting significant risks for companies like Monday.com, Asana, and Sprout Social, which may be forced to explore strategic alternatives.
- Poor Market Reactions: Despite Salesforce CEO Marc Benioff claiming the latest quarter was the “best of their careers,” the market response has been tepid, with ServiceNow's shares dropping 17% over a week, reflecting investor skepticism towards companies lacking an AI strategy.
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Analyst Views on CRM
Wall Street analysts forecast CRM stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for CRM is 326.95 USD with a low forecast of 223.00 USD and a high forecast of 405.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
42 Analyst Rating
31 Buy
10 Hold
1 Sell
Moderate Buy
Current: 227.960
Low
223.00
Averages
326.95
High
405.00
Current: 227.960
Low
223.00
Averages
326.95
High
405.00
About CRM
Salesforce, Inc. is a provider of customer relationship management (CRM) technology. The Company helps organizations of any size reimagine their business for the world of artificial intelligence (AI). With Agentforce, its platform, organizations can bring humans together with AI agents to drive customer success on one deeply unified platform. With the Salesforce platform, it delivers a single source of truth, connecting customer data with integrated AI across systems, apps and devices to help companies sell, service, market and conduct commerce from anywhere. Agentforce is a new layer of the Salesforce platform that enables companies to build and deploy AI agents that can respond to inputs, make decisions and take action autonomously across business functions. Agentforce includes a suite of customizable agents for use across sales, service, marketing and commerce. Datablazer is a data-driven innovator, which leverages the Company’s platform to unlock insights and drive decisions.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Salesforce 2025 Stock Review and AI Strategy
- Annual Stock Performance: Salesforce's stock declined nearly 21% in 2025, although a late-year rally driven by aggressive AI initiatives provided some recovery, highlighting market biases against traditional software companies.
- Revenue Growth Volatility: Throughout 2025, Salesforce's year-over-year revenue growth remained in single digits, with GAAP net income fluctuating, showing a 51% improvement at times but overall failing to significantly exceed analyst expectations, which affected investor confidence.
- Pricing Strategy Adjustment: The company implemented a 6% price increase for enterprise clients in August, demonstrating management's proactive approach to enhancing profitability and margins, gradually improving market sentiment and reflecting confidence in future growth.
- AI Platform Launch: At the Dreamforce event, Salesforce unveiled Agentforce 360, focusing on agentic AI that actively performs tasks, setting a new annual revenue target of $60 billion by fiscal 2030, marking a strategic shift in the company's AI direction.
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Microsoft Earnings Trigger Market Decline
- Market Reaction: The stock market fell on Thursday, led by Microsoft, whose stock dropped nearly 12% after earnings failed to boost Azure growth, indicating investor caution towards tech stocks.
- Earnings Analysis: Microsoft exceeded revenue and earnings estimates for Q2 FY2026, yet Azure's lack of significant growth highlights challenges in balancing capital expenditures and improving margins.
- Strong Meta Performance: In contrast to Microsoft, Meta reported a 24% revenue increase, with its stock climbing over 9%, reflecting strong market confidence and the positive impact of increased investment despite overall market weakness.
- Apple's Uncertain Outlook: Heading into its earnings release, Apple saw a modest decline, with market focus on its ability to manage costs from memory shortages and the implications of its partnership with Alphabet to utilize Gemini AI models.
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