'No Reasons To Own': Software Stocks Sink on Fear of New AI Tool (bloomberg.com) 40
The new year was supposed to bring opportunities for beaten-down software stocks. Instead, the group is off to its worst start in years. From a report: The release of a new artificial intelligence tool from startup Anthropic on Jan. 12 rekindled fears about disruption that weighed on software makers in 2025.
TurboTax owner Intuit tumbled 16% last week, its worst since 2022, while Adobe and Salesforce, which makes customer relationship management software, both sank more than 11%. All told, a group of software-as-a-service stocks tracked by Morgan Stanley is down 15% so far this year, following a drop of 11% in 2025. It's the worst start to a year since 2022, according to data compiled by Bloomberg.
While unproven, the tool represents just the type of capabilities that investors have been fearing, and reinforces bearish positions that are looking increasingly entrenched, according to Jordan Klein, a tech-sector specialist at Mizuho Securities. "Many buysiders see no reasons to own software no matter how cheap or beaten down the stocks get," Klein wrote in a Jan. 14 note to clients. "They assume zero catalysts for a re-rate exist right now," he said, referring to the potential for higher valuation multiples.
TurboTax owner Intuit tumbled 16% last week, its worst since 2022, while Adobe and Salesforce, which makes customer relationship management software, both sank more than 11%. All told, a group of software-as-a-service stocks tracked by Morgan Stanley is down 15% so far this year, following a drop of 11% in 2025. It's the worst start to a year since 2022, according to data compiled by Bloomberg.
While unproven, the tool represents just the type of capabilities that investors have been fearing, and reinforces bearish positions that are looking increasingly entrenched, according to Jordan Klein, a tech-sector specialist at Mizuho Securities. "Many buysiders see no reasons to own software no matter how cheap or beaten down the stocks get," Klein wrote in a Jan. 14 note to clients. "They assume zero catalysts for a re-rate exist right now," he said, referring to the potential for higher valuation multiples.
"You will own nothing..." (Score:2, Troll)
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Yeah well they're shit (Score:3)
Adobe and Salesforce, which makes customer relationship management software, both sank more than 11%.
Everything Salesforce does is shit, and most of what Adobe does is shit. Acrobat reader still can't even display PDFs created with Acrobat Pro reliably for example. e.g. I scroll and the checkboxes disappear and it lags. Perhaps they should focus on making things work instead of adding new features nobody is asking for. There's too much competition today. There are perfectly good OSS CRMs, there's competition for every product Adobe sells, and not having to deal with Adobe is reason enough to consider it.
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"...there's competition for every product Adobe sells, and not having to deal with Adobe is reason enough to consider it."
That is true, but it does not support the claim that "most of what Adobe does is shit." Adobe is an industry leader in a number of areas, Photoshop is definitely NOT shit.
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That is true, but it does not support the claim that "most of what Adobe does is shit." Adobe is an industry leader in a number of areas, Photoshop is definitely NOT shit.
I used to run IT at a graphic design firm. For years, the joke was that it was Adobe's market to lose, and they were working on it. However, the one crown jewel was always Photoshop. They could (and did) fuck up Illustrator, they could (and did) fuck up Acrobat, etc... but if they fucked up Photoshop, it would be like downing a whole bottle with a skull-and-crossbones label on it.
Photoshop seems to be doing well today, but there are legitimate alternatives. Clip Studio Paint is much cheaper and has tons of
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There may be a point to this...
Taking TurboTax as an example. Lets say I use it to fill out my tax return - it's entirely conceivable that I could create an app that does that one task perfectly adequately. If you believe the hype, I could create such a thing by vibe-coding it in a weekend. Thus, TurboTax has no utility for all those customers who just use it to fill out their tax returns (it still has value to those who maybe do other tax related things with it though).
The problem of course is that any old
The draft inspection problem (Score:1)
Taxes are not something you want bots guessing at. Most places AI is doing well are where drafts are first created and then tuned using a combination of tools. Tax doesn't work that way because the user is not looking at image or text to be tweaked, they can't normally "see" the algorithm a tax computing gizmo is using to know where to tweak.
If users knew enough to readily tweak tax algorithms, they probably would use a spreadsheet anyhow, it's a tweaker's quickest route to KISS.
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This isn't about turbotax. We are not going to have 100 million people create a tool to do their taxes. Heck, I have the knowledge (and my previous taxes as base) to do my own taxes, but I don't. Why? Because I can't e-file on my own, and I can't be bothered to print something out and wait forever for a refund. (RIP IRS Direct File)
It might be about Quickbooks. However, I think it's more likely to see people build QBO alternatives and the market flooded with vertical-specific competitors than everyone makin
the death of adobe (Score:1)
The death of Adobe was the subscription model. Because at that point Adobe no longer had to earn money from customer upgrades. The money came in every month no matter what. So the products that Adobe cared less about (e.g. Acrobat) got much less attention while the flagships (e.g. Photoshop) got a little less attention. This opened up room for competition -- there was a long time when Adobe products were best of breed pretty much across the board -- and cheesed off customers who were very much aware that th
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Adobe and Salesforce, which makes customer relationship management software, both sank more than 11%.
Everything Salesforce does is shit, and most of what Adobe does is shit. Acrobat reader still can't even display PDFs created with Acrobat Pro reliably for example.
I agree with your general point about e.g. Adobe being shit, but your second point is probably a bit stale. Reader and Pro are the same codebase at this point (you can log in to reader with Adobe credentials, and it becomes Pro without even requiring you to restart the application).
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If they fixed it, it was in the last week. I haven't opened that file in about that long. Point taken about it being one program, but it's still a PDF made by Adobe and malfunctioning in Adobe
Never you mind (Score:2)
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That should be the *expected* thing when a really new way of doing things shows up. Look at the early days of computers. (Well, the late 1950's through the early 1980's.) This didn't mean that computers weren't a good approach, it meant that people weren't using them correctly...except that some people were.
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After all, if we can get it to be closer to Star Trek's LCARS, the models will hold the sum of human knowledge in a single accessible system. Hopefully the companies come up with a better interface, but I digress. Should it be the actual sum of human knowledge, in infinitely searchable form, with the user able to adju
investors are not bright, only wealthy (Score:2)
"Many buysiders see no reasons to own software no matter how cheap or beaten down the stocks get"
Doesn't say much for "buysiders" then.
Isn't AI itself software property?
Sorry not sorry Adobe (Score:5, Funny)
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Adobe can take their Creative Cloud subscription and recurringingly shove it up their asses.
FTFY
Anecdote: I had a CC subscription and tried to uninstall it when no longer needed, but couldn't. The uninstaller kept crashing. I tried to delete app folders, EXE's etc., but its zombie guts keep trying to run or contact HQ for updates etc. even to this day.
It reminds me of one Battlebots fight where the bot with the bigger weapon shattered the other into pieces. The bout clearly looked to be over, the apparent w
Claude Co-Work (Score:2, Informative)
I had to click into the article, and then into a link FROM that article, to find out the name of this "new AI tool"
It's Claude Co-Work
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But it's interesting that Claude Co-Work was largely written by Claude Code. (My uninformed guess is that it's largely an interface stuck on top of it.)
Re: Claude Co-Work (Score:2)
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It's new because it's a mix that hasn't happened before. Sometimes that's really important, but from casual glances, CoWork doesn't handle anything that I'd want to get done.
OTOH, I'm not sure about ClaudeCode either. I haven't used it, but the promos all seem to be about web applications. Not what I'm interested in.
Write worthwhile apps and support them properly! (Score:2)
Obviously, the software giants out there like Adobe and Microsoft aren't going away. They provide so many entrenched software apps/tools that do tasks people need in the business world, and that employees are actually trained in/familiar with using.
But increasingly, the code they're cranking out is underwhelming and not exciting NEW users to adopt any of it.
I don't see how any of them can achieve much growth without developing compelling, brand new applications first? This is like Pepsi or Coca Cola at thi
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Sadly, many people are just moving to phones.
I seem a gamedev once complain that half of the kids didn't knew how to use a keyboard, mouse OR controller anymore.
It's a pretty terrible future.
Picture editing I get, but TurboTax?! (Score:2)
Sure, most people can probably get their photo editing/touch ups done with a simple AI tool. But letting AI help you fill out your taxes?! Unless people are using TurboTax to fill out their 1040EZ forms (and dear God, I hope not) it's hubris to let AI do their taxes with the complexity of the tax code, let alone the HUMAN interaction of the IRS shifting rules interpretation at whim.
Somebody can train an AI engine solely on tax code and offer that as a solution. But then you have something like TurboTax A
Wasn't that already their platform? (Score:2)
Don't most of the proprietary companies already claim their customers don't own the copies of software that they "purchased?"
By their standards, software ownership isn't changing one iota.
Sick Of AI Wasting My Time (Score:5, Interesting)
Just yesterday, I went to Claude for a very common Powershell script. I thought that it would be quicker to have Claude generate this customized variant than me digging out an old copy.
The appropriate script should have been 10-15 lines of code, executing four key steps. Claude completely missed one of the four steps and had to be corrected twice to get them. CLaude bloated the fuck out of it to 40+ lines that didn't work and I could not be bothered to debug. 16+ iterations of the script before I said fuck this. I closed Claude, found a 15 line copy of an old script, and did the needful in two minutes.
Yet another instance of AI leading me round the garden path for way too much wasted time.
I marvel at some of these supposedly vibe coded web applications that are thrown out there. That they work at all, let alone do complex stuff well, all while looking great, is amazing. And it leads one to question my prompting skills. But, when a four word Google search immediately gives me 15 different working solutions to my problem and Claude dicks around for 30 minutes before I abort, that tells me that the problem isn't just me.
I'm sick of AI wasting my time!
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This happened to me the other day too. I don't know why I get suckered into it.
I had a problem where my LSP was returning ??? at the beginning of completions; there were some non-UTF-8 characters in there and I didn't know where they came from. ChatGPT said it was a known problem from some Visual Studio compile flags when they get passed to Clang. In retrospect, that's stupid.
But it said it could solve the problem for me by intercepting the .rsp files, stripping the bad flags, and then passing them on. It w
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Your experience is an example of why programmers won't be out of work in 10 or 20 or 50 years.
These tools are good at coming up with rough ideas for many things, like functions or paragraphs. But you should never *trust* it to give you a functional or optimal solution.
The stock market is insane (Score:2)
It often seems like a bunch of people frantically trying to predict an unpredictable future and placing bets based on speculations of hypemongers and lying salesweasels
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I think that the amount of investment directly controlled by total fuckwits in today's economy is a big part of the problem. In the past if you were a wealthy fuckwit and wanted to invest in some stocks, you were almost certain to hire someone who knew what the hell they were doing to manage your investments just because that was the easiest way to buy stock at all. Today the path of least resistance to buying stocks is to do it directly through some sort of app where nobody who knows a damn is in sight to
Is the AI going to go to jail for you? (Score:2)
Tax software is one of the last places I'd expect AI to take over. Tax software is implementing a whole lot of very detailed rules and regulations to produce forms. Any sort of AI approximation, hallucination, or other slop is entirely unacceptable if you don't want to have the IRS auditing you and threatening to send you to pound-me-in-the-ass Federal prison. So no one in their right mind is going to say "ChatGPT, here's my W2s, 1099s, etc, produce a 1040 for me".
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Fun fact: we don't even seem to be able to give "the AI" traffic tickets yet in CA [motortrend.com].
On a more serious note, the likelier scenario is: an AI company roll out an AI tax prep tool that waives all liability and is, say, 50% cheaper than all the (non-free) alternatives. I can see people going for that. Some will say, well, I'll do it if the expected value of my refund minus my cost and penalty dollar value is > 0. I'm not one of those people. But they're out there.
Intuit and Adobe haven't written software in years (Score:2)
Mostly, they just coast on monetizing stuff they wrote decades ago. What lets them maintain their positions is not their crack software teams, it's their business relationships with other companies that their users need to interact with. And lobbying. Not clear how AI is going to do much for any of that.
Turbotax? (Score:2)
I think Turbotax is a scammy product, but that sector should be the least affected by AI. For your sake, I sure hope you aren't trusting an LLM to do your accounting, or your taxes...
No digital citizenship (Score:2)
The corporations aren't selling tools, they're selling permission to have employment, permission to have a digital life.
Governments are trying to eliminate the anonymous subscriber: They're demanding corporations track the people using their services and, if needed, label them as un-persons. The idea of "netizen" has fallen out of favour but that is exactly what corporations are creating: A digital citizenship that can be revoked by them, where they can control access to government, to healthcare, to e