Software Stocks Plummet, Led by 11% Drop in Intuit Shares
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 04 2026
0mins
Should l Buy CRM?
Source: stocktwits
- Market Panic Intensifies: Software stocks fell sharply on Tuesday, led by an 11% drop in Intuit shares, as concerns grew over AI tools like those from Anthropic potentially undermining traditional software demand, resulting in decreased investor confidence.
- Increased Competition: Adobe and Salesforce saw declines of 7.3% and 42%, respectively, indicating that traditional software companies are facing heightened competitive pressures as AI technologies mature, which could impact their future revenue growth.
- Investor Sentiment Shift: Despite Intuit and Salesforce's forward P/E ratios of 18.3 and 15.5 suggesting attractive valuations, the overall market outlook for the software sector remains pessimistic, prompting investors to sell off shares.
- AI Impact Becomes Apparent: With the introduction of AI tools like Claude Cowork, the growth momentum in the software industry is challenged, as noted by William Blair, who stated that fear, rather than fundamentals, is driving the sell-off, necessitating a reevaluation of the long-term value of software companies.
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Analyst Views on CRM
Wall Street analysts forecast CRM stock price to rise
42 Analyst Rating
31 Buy
10 Hold
1 Sell
Moderate Buy
Current: 185.430
Low
223.00
Averages
326.95
High
405.00
Current: 185.430
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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- Unique Market Positioning: The company focuses on providing software for HVAC, roofing, plumbing, and other skilled trades, catering to specific needs and avoiding direct competition with large enterprise software, thus remaining relatively insulated from AI disruptions.
- Improved Profitability: ServiceTitan's non-GAAP operating margin increased from 0.8% to 8.6% year-over-year, indicating significant progress in cost optimization and efficiency, enhancing its future profit potential.
- AI Application Prospects: Executives mentioned integrating AI technologies into their platform during the latest earnings call, indicating that ServiceTitan not only embraces AI but plans to leverage it to enhance software performance, maintaining a competitive edge.
See More
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- AI Tool Launch: Anthropic has introduced the Claude Cowork AI agent designed to simplify mundane tasks such as searching and organizing files, which has raised concerns among investors about the potential disruption to traditional software and digital automation providers.
- Market Reaction: The S&P North American Technology Software Index has plunged over 30% into bear market territory, reflecting investor fears that AI technologies could replace traditional software, although many experts disagree with this outlook.
- Expert Opinions: Nvidia CEO Jensen Huang and Wedbush analyst Dan Ives argue that the software industry is not in decline and that enterprises are unlikely to abandon decades of investment in software and infrastructure, creating buying opportunities for certain tech stocks.
- Stock Analysis: Companies like Microsoft, CrowdStrike, Snowflake, Salesforce, and Palantir are viewed as having strong growth potential in the AI sector, despite their stock prices having fallen from peaks, with analysts remaining optimistic about their future performance.
See More
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- Market Reaction: The S&P North American Technology Software Index has plunged over 30%, entering bear market territory, reflecting investor fears that AI technologies could replace traditional software, adversely affecting stock performance in the sector.
- Expert Opinions: Despite the prevailing market pessimism, Nvidia CEO Jensen Huang and Wedbush analyst Dan Ives argue that enterprises are unlikely to abandon their long-term software and infrastructure investments, suggesting that the current sell-off is overdone and may present buying opportunities for high-quality tech stocks.
- Investment Opportunities: As AI technology continues to evolve, companies like Microsoft, CrowdStrike, and Snowflake, which have heavily invested in AI integration and product development, are expected to drive market demand, and despite their stock prices having fallen, they are still viewed as potential investment opportunities.
See More
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- Market Mispricing: Wedbush analyst Dan Ives argues that investors are misinterpreting the impact of artificial intelligence on enterprise software, leading to over 20% declines in large-cap software stocks like Salesforce and ServiceNow over the past month, indicating exaggerated fears of AI replacing traditional software.
- Customer Stickiness: Ives emphasizes that enterprise customers are deeply embedded in platforms like Salesforce and ServiceNow, with high switching costs and long-term contracts limiting near-term disruption, suggesting that these software moats remain intact.
- AI Monetization Potential: While AI monetization across major software firms is still in its early stages, Ives believes it could ultimately accelerate revenue growth rather than diminish it, reflecting an optimistic outlook for future growth.
- Rebound Expectations: JPMorgan strategists note that the market's pricing of near-term AI disruption appears unrealistic, suggesting that the balance of risks is skewed towards a rebound, indicating that the sell-off in Salesforce and ServiceNow is overdone, and both will be core participants in the AI revolution.
See More
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- Market Recovery: The S&P 500 index rose by 0.05%, the Dow Jones Industrial Average by 0.10%, and the Nasdaq 100 by 0.18% on Friday, indicating a recovery after early losses, reflecting cautious optimism among investors regarding future economic prospects.
- Inflation Data Impact: The U.S. January Consumer Price Index rose by 2.4% year-over-year, below the expected 2.5%, marking the smallest increase in seven months, which may prompt the Fed to continue cutting rates, thus providing support for the stock market and alleviating concerns over rate hikes.
- Strong Software Stock Performance: Software stocks like Crowdstrike Holdings and ServiceNow rose over 4% and 3%, respectively, lifting the broader market and indicating a rebound in investor confidence in tech stocks, particularly amid rapid advancements in AI technology.
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See More
