Software Stocks Plummet, Led by 11% Drop in Intuit Shares
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 04 2026
0mins
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
39 Analyst Rating
29 Buy
9 Hold
1 Sell
Moderate Buy
Current: 176.310
Low
223.00
Averages
326.40
High
405.00
Current: 176.310
Low
223.00
Averages
326.40
High
405.00
About CRM
Salesforce, Inc. is a customer relationship management (CRM) technology company. Its artificial intelligence (AI) powered Agentforce 360 Platform offers sales, service, marketing, commerce, collaboration, data management, integration, analytics, and information technology (IT) service solutions. It enables customers to build and deploy digital labor for employees and customers, leveraging autonomous AI agents across business functions. Its service offerings include Agentforce Sales, Agentforce Service, Agentforce 360 Platform, Slack and Others. The Agentforce Sales provides sales capabilities and tools built for organizations across prospecting, sales engagement, team collaboration, sales analytics and AI, sales programs, sales performance, partner management, and revenue and orders. The Agentforce Service provides field service solutions that enable companies to connect service agents, dispatchers and mobile employees through platform to schedule, dispatch and manage jobs.
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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- Interest Rate Impact: A drop in the 10-year Treasury yield can boost SaaS valuations by 5-10%, highlighting the market's sensitivity to long-duration cash flows, particularly given the high renewal rates of these contracts.
- Market Sentiment Shift: With progress in Iran peace talks, market sentiment has calmed, leading investors to focus on SaaS companies that can leverage AI to extend their competitive moats, suggesting a healthier market environment compared to the previous day's broad sell-off.
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- Rising Inflation Expectations: The 1-year inflation expectations for May were revised upward to 4.8%, exceeding the expected 4.6%, potentially prompting the Federal Reserve to consider interest rate hikes in upcoming meetings, which could pressure the stock market.
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- Increased Inflation Pressure: The upcoming personal consumption expenditures price index is expected to show core PCE rising to 3.4% year-over-year in April, up from 3.2% in March, potentially increasing pressure on the Federal Reserve to raise interest rates, which could affect market sentiment.
- Economic Data Impact: Next week will see several economic data releases and earnings reports from key tech companies that could significantly impact the markets, particularly consumer commentary from Costco and Dollar Tree, which may trigger market volatility.
See More
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