Salesforce CEO Marc Benioff speaks about Squawk on the Street at the World Economic Forum in Davos, Switzerland on January 20, 2026.
Oscar Molina CNBC
Cloud software stocks started this year in sell mode that ended in 2025.
Investors told CNBC that the continued downward spiral is setting the stage for a flurry of acquisitions.
of WisdomTree Cloud Computing FundThe company, which tracks cloud software, is down more than 8% so far this year, while the Nasdaq is up slightly. Typical software names are: sales force, ServiceNow and adobe The stock is down more than 14% after significantly underperforming the market a year ago.
The most important concern is that artificial intelligence will eventually replace key parts of the enterprise stack as IT buyers rely on AI agents to handle tasks currently handled by software vendors large and small. Those concerns were amplified last week when Anthropic’s Claude announced an AI agent tool called Cowork aimed at enterprise customers.
A senior investor at a major private equity fund, who requested anonymity to speak candidly about the matter, said the software disruption occurring today is forcing some mid-sized software companies to explore financing options and could spur private equity acquisitions.
Orlando Bravo, co-founder of software-focused acquisition firm Thoma Bravo, is looking to buy on that momentum, seeing value in companies that are building unique agent solutions that work with existing systems.
“We’re seeing an incredible buying opportunity right now,” Bravo told CNBC’s Sara Eisen in Davos on Wednesday. He said his company is pursuing deals and “will be more active.”
While investors like Bravo remain bullish on software in a world dominated by AI, KeyBanc analyst Jackson Ader sees real vulnerabilities. He conducted an analysis of the major threats facing software in August, when sheet-based application companies like Monday.com Asana and sprout social Most exposed. All three stocks experienced double-digit declines in 2026.
In the same memo to clients, Bader said these companies are not tied to core systems of record like enterprise resource planning (ERP) or customer relationship management (CRM) and have not yet become multi-product platforms. Representatives for Monday, Asana and Sprout did not respond to requests for comment.
Even companies with a broader range of products and more established business bases face greater skepticism from the market.
Salesforce CEO Marc Benioff has spent months defending his company and trying to reassure investors that the company is well-positioned in AI.
At Davos, Benioff told Eisen that the company’s latest quarter was “the best quarter of my career so far” and that “we are one of the largest cash generating companies in the world.”
“But that’s not enough,” Benioff said, referring to market movements. “Because if you don’t create language models at scale, it’s clearly not trendy right now.”
ServiceNow is responding to the pressure by joining potential competition. The company announced Wednesday a deal with OpenAI to use its model to offer AI agents to enterprise customers.
This news did not alleviate concerns. ServiceNow stock fell for six straight business days before rising Thursday, and was down 17% in January.
hubspot, atlassian and brazing The year is off to an even worse start, with each company’s stock price down more than 20%.
Rishi Jallia, an analyst at RBC Capital Markets, told CNBC that the recent sell-off in software stocks may force some companies to “explore strategic alternatives,” and that new deals that don’t have an attractive AI angle won’t attract investor attention.
In a memo published in late November, Jallia emphasized that asanas: box and docusign as a potential software acquisition target. The companies did not respond to requests for comment.
As tech earnings season gets into full swing next week, Wall Street will begin to get a clearer picture of whether certain companies will adopt or be swallowed up by AI.
Luria said one of the key questions is how quickly AI agents like Claude’s Cowork can actually automate different parts of the software lifecycle beyond the development of new code. This timeline is critical to understanding the reality of AI threats and how quickly cloud software companies will feel the pain.
—CNBC’s Noah Broder contributed to this report.
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