Software Stocks Face Worst Monthly Decline Since 2008 Amid AI Concerns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5d ago
0mins
Should l Buy CRM?
Source: Benzinga
- Market Sentiment Shift: The software sector has experienced its worst monthly decline since 2008, with the iShares Expanded Tech-Software Sector ETF dropping 20.19% and the State Street SPDR S&P Software & Services ETF declining 17.25%, indicating a heightened panic among investors that could lead to a loss of long-term confidence.
- ‘SaaSpocalypse’ Phenomenon: Jeffrey Favuzza from Jefferies describes the current market activity as a ‘doomsday’ for software-as-a-service stocks, reflecting extreme pessimism and a rush to sell among investors, which raises significant concerns about the industry's future.
- Bounce Back Potential: BTIG analyst Krinsky suggests that while software stocks may be oversold enough for a bounce, he cautions that the rapid deterioration of the sector's relative strength may require considerable time to ‘repair and build a new base’ before any recovery can occur.
- AI-Driven Outlook Warning: Jim Cramer warns on CNBC that software companies may ‘shrivel up and die’ in the current environment, noting that the market is aggressively shrinking price-to-earnings multiples as investors lose trust in the traditional ‘per seat’ licensing model in an AI-driven world.
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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: 189.970
Low
223.00
Averages
326.95
High
405.00
Current: 189.970
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.
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- Historical Changes: Ives noted on X that he had previously removed Salesforce and ServiceNow from his IVES AI 30 list in December, and their reinstatement reflects an optimistic outlook on their future performance, which could influence market perceptions of these companies.
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- Dual Nature of AI Impact: Despite market fears regarding the disruptive potential of AI tools, a16z partner Anish Acharya stated that there is still much software to build, asserting that while AI can automate tasks, it cannot fully replace human jobs, highlighting the importance of personal relationships in customer support.
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