NEW YORK, Jan 20, 2026, 10:38 EST
- A basket of software-as-a-service stocks tracked by Morgan Stanley has dropped roughly 15% so far this year, following an 11% decline in 2025.
- Intuit dropped 16% last week, with Adobe and Salesforce tumbling over 11%, as a fresh AI tool from Anthropic sparked fresh disruption fears.
- Anthropic’s Claude Cowork has intensified investor concerns over the potential for “AI agents” to disrupt subscription software models. Semafor
U.S. software stocks are off to their worst start in years, as investors question if a fresh wave of AI tools could replace pricey, seat-based subscriptions from long-standing vendors.
The selloff is sharpening a well-worn divide in tech. The Nasdaq 100 stays close to record highs, while certain software stocks have slid to multi-year lows. Meanwhile, a Morgan Stanley basket tracking SaaS — subscription software delivered online — just hit its lowest valuation ever.
The threat landscape is shifting. Anthropic’s latest launches—like its “Cowork” tool and a healthcare-specific product—have unsettled investors who believed enterprise software was safe thanks to regulation, data, and workflow barriers, Business Insider reported.
Cowork is described as an “agent” — software designed to plan and execute tasks, not merely respond to queries. Anthropic claims the tool can compile spreadsheets from screenshots, draft reports using scattered notes, and sometimes operate across files and apps. Still, the company cautions about potential security risks and errors from relying on an automated assistant. TechRadar
Skeptics argue the market is betting on a disaster before the facts are clear. William Blair analyst Arjun Bhatia described Cowork as “the latest Boogeyman in software,” telling Barron’s the selloff “seems overdone.” Barron’s
The contrarian argument hinges on what incumbents still hold: distribution channels, customer ties, and exclusive data. MarketWatch highlighted investors noting Salesforce’s Agentforce rollout and Snowflake’s AI-driven revenue gains as evidence some big players are carving out ways to profit from AI instead of being sidelined by it.
Some argue the sell-off makes sense. Salesforce dropped 6.5% in a single day last week, while Adobe tumbled 5.4% to hit a multi-year low. Investors are skeptical about whether AI-fueled productivity gains will actually reduce the need for existing tools, and if the early AI features will deliver lasting revenue, reported.
The developer tooling surge is fueling the story. A Sherwood News columnist argued last week that “Claude Code is the ChatGPT moment repeated,” warning it might spell “awful news for software stocks.” Sherwood News
That buzz is tangible on the ground. Over 150 attendees crammed into a Claude Code meetup in Seattle, where a product engineer highlighted “closing the feedback loop” as the game changer — letting the tool act, evaluate outcomes, and then iterate. GeekWire
Investors, however, are bracing for a bumpier ride. AI agents may improve, but firms must still entrust them with sensitive data and key operations. The “per-seat” licensing model might turn out more stubborn than expected if companies restrict automation over compliance, security, or accountability concerns. Investors
The risk is straightforward: if agents get good enough to take over specific software tasks, subscription pricing could weaken, turning today’s “cheap” multiples into a value trap. Doug O’Laughlin of Fabricated Knowledge labeled this shift an “extinction-level event” for certain horizontal software segments, suggesting the industry might have to rethink both its products and its target customers. fabricatedknowledge.com
