Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials HomeInvestorAdobe, Salesforce downgrades accelerate in latest fallout from AI threatThe software sector has come under selling pressure this year on worries that competition from AI services will erode the industryAuthor of the article: You can save this article by registering for free here. Or sign-in if you have an account.Salesforce headquarters in San Francisco. More Wall Street analysts are recommending selling Adobe Inc. and Salesforce Inc. stock than they have in years. Photo by David Paul Morris /BloombergConcerns about the impact artificial intelligence will have on software companies have prompted more Wall Street analysts to recommend selling Adobe Inc. and Salesforce Inc. stock than they have in years.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorMorgan Stanley is the latest to caution about the risk, downgrading both the companies along with several other stocks in the sector. At least five — including Stifel, Evercore ISI, Wolfe Research, and Phillip Securities — have cut their recommendation on Adobe since the start of June, and more than a dozen firms have downgraded it in 2026.With these cuts, Adobe’s consensus recommendation — a proxy for the ratio of buy, hold, and sell ratings — has dropped to 3.3 out of five. That’s the lowest since the 1990s, according to data compiled by Bloomberg. For Salesforce, that number is now 4.4, the lowest since 2012, after recent downgrades from both Morgan Stanley and KeyBanc Capital Markets citing its Agentforce AI product.Canada's best source for investing news, analysis and insight.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Investor will soon be in your inbox.We encountered an issue signing you up. Please try againThe moves underscore caution toward the software sector, which has come under heavy selling pressure this year on worries that competition from AI services will permanently erode the industry’s growth potential, pricing power, and margins.“Adobe’s concurrent freemium, leadership, and reinvestment transitions compound execution risk as the GenAI disruption debate increasingly clouds the path to ARR re-acceleration,” wrote Morgan Stanley analyst Adam Wood, referring to annual recurring revenue.While the valuation prices in “much of this disruption risk, Adobe’s simultaneous transitions reduce visibility – and therefore our conviction – in the timing and magnitude of a potential turnaround,” Wood added.On Salesforce, Morgan Stanley’s Elizabeth Porter wrote that key performance indicators for the company’s Agentforce AI product “have yet to drive an inflection in organic growth as legacy portfolio drags persist.”Morgan Stanley also downgraded several other companies within software, including: Workday Inc., Intuit Inc., JFrog Ltd., Elastic NV, PagerDuty Inc., Rapid7 Inc., SPS Commerce Inc., BlackLine Inc., and Vertex Inc. It upgraded Fortinet Inc. to equal-weight, seeing “a solid near-term setup” for the security software company.The iShares Expanded Tech-Software Sector ETF, an exchange-traded fund that is a widely used proxy for the sector, fell one per cent on Tuesday, bringing its year-to-date decline to 13 per cent. Adobe slumped 3.7 per cent and was down more than 35 per cent this year. Salesforce slid 1.6 per cent and had declined about 36 per cent in 2026. Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.