Enterprise software stocks across the board are experiencing weakness to start the New Year’s first day of market action, extending a trend that plagued much of the sector during 2025.
Salesforce (CRM) shares were down 3% by noon trading. Its shares have shed more than 20% of their value over the last year. ServiceNow (NOW) had declined 3.7% as its share price has dropped 30% in the past 12 months. Workday (WDAY) had slipped 5%, while monday.com (MNDY) had inched down 0.3%. Zoom Communications (ZM) had fallen 3.5%.
Palantir (PLTR), which experienced strong gains throughout 2025, was down 4%. Adobe (ADBE) had dropped 4%. Accenture (ACN) was down 1.7%, and HubSpot (HUBS) had declined 4%.
Cybersecurity software firms were also demonstrating declines during Friday trading. CrowdStrike (CRWD) was down 3.5%, Check Point Software Technologies (CHKP) had slid 2%, Fortinet (FTNT) was down 1.7%, and Palo Alto Networks had declined 2.5%.
In contrast, semiconductor stocks were by and large starting the year in the green. The rise of artificial intelligence has played out very differently for software and hardware stocks. While the hardware powering AI applications has benefitted greatly from AI, the software sector has mostly stagnated.
The iShares Expanded Tech-Software Sector ETF (IGV) has only increased by 3% over the past year. In comparison, the Philadelphia Semiconductor Index (SOX) has surged 47%.
Most major software firms are generating slight revenue gains from AI. Investors are also concerned that “AI will upend the software industry, either by reducing licensing revenue by making it easier and less labor-intensive to perform tasks without human input or by rendering traditional software applications totally obsolete,” according to a recent report by Morningstar.
This has certainly been a fear around Adobe, which has sunk 25% over the past year. It has also dampened the nascent performance of competitor Figma (FIG), which launched its initial public offering in late July. Its shares have plunged 69% since its lofty debut.