Salesforce Inc. (NYSE:<\/a>CRM<\/a>) sits near May 2024 levels, down about 40% from its January 2025 high. ServiceNow Inc. (NYSE:<\/a>NOW<\/a>) is at its lowest since November 2023, off roughly 45% from its January 2025 peak.<\/p>\n To many investors, that looks like classic mean reversion. AI hardware stocks like Micron Technology Inc. (NASDAQ:<\/a>MU<\/a>) and Nvida Corp. (NASDAQ:<\/a>NVDA<\/a>) have run, software has lagged, and the trade is to rotate.<\/p>\n Don’t Miss:<\/p>\n But according to 22V Research’s analyst Jordi Visser, that instinct may be exactly backward.<\/p>\n Visser indicates that this is not a cyclical selloff, but the early stages of something structural: AI-driven demand suppression.<\/p>\n “This isn’t a typical sector rotation or a buying opportunity in beaten-down software names.”<\/p>\n Instead, Visser frames the move as something structural \u2014 rooted in how AI changes the economics of building, buying, and using software itself.<\/p>\n For decades, enterprise software adoption was shaped by one central constraint: building software internally was expensive, slow, and risky. That friction made buying SaaS the default decision.<\/p>\n Trending: If there was a new fund backed by Jeff Bezos offering a 7-9% target yield with monthly dividends would you invest in it<\/a>?<\/p>\n Over time, this dynamic enabled sprawl. Each workflow justified a new vendor. Each department accumulated its own stack. Administrative surface area expanded quietly alongside revenue.<\/p>\n \u201cWhen software can be generated, modified, and orchestrated by agents at near-zero marginal cost, \u2018build\u2019 stops being a strategic project and becomes an everyday action. At that point, the entire buy-side market for software isn’t disrupted, it’s suppressed,\u201d Visser said.<\/p>\n See Also:<\/p>\n The market often treats 40% to 60% drawdowns as an opportunity. Visser sees a trap. He compares the \u2018cheap software\u2019 trade to buying snack companies after appetite-suppressing drugs like Ozempic went mainstream.<\/p>\n \u201cGLP-1 medications are eliminating food noise. Agentic AI is eliminating software noise. Both are appetite suppressants. Both are liquidating the middleman, whether that is the biological craving or the digital interface,\u201d he said.<\/p>\n The implication is critical. When hunger noise disappears, consumption falls. When administrative friction disappears, software usage contracts.<\/p>\n That helps explain why stocks like ADBE, CRM and NOW are under pressure. These business models are still tied to seat\u2011based pricing, subscription layers and administrative interfaces \u2014 all things agents are steadily eroding.<\/p>\n This is why Visser cautions against reading falling software prices as value.<\/p>\n “They are confusing the suppressant for the bubble and the bloat for the value.”<\/p>\n See Also: Blue-chip art has historically outpaced the S&P 500 since 1995, and fractional investing is now opening this institutional asset class to everyday investors.<\/a><\/p>\n Another force accelerating the pressure on legacy software is organizational mismatch. AI improves in step functions. Large software companies move in quarters, roadmaps, and release cycles.<\/p>\n By the time incumbents ship new AI features, entire workflows may already be automated away.<\/p>\n Visser indicates legacy software companies are no longer competing with each other \u2014 they are competing with the pace of AI capability improvement itself, a race they are structurally ill-equipped to win.<\/p>\n This framework reframes how investors should interpret current price action. The drawdowns in Adobe, Salesforce, and ServiceNow may not represent cyclical lows, but reflections of a contracting economic surface area, the analyst said.<\/p>\n Buying beaten-down software stocks today often amounts to a bet on inertia \u2014 that procurement habits, organizational resistance, and human interfaces will outlast exponential AI progress.<\/p>\n History suggests the opposite.<\/p>\n \u201cThe real divide now is not between “AI winners” and “AI losers,” but between organizations positioned for the old appetite and those built for the new one,\u201d he said.<\/p>\n \u201cThe only remaining question is whether capital is aligned with that reality, or anchored to the one that just ended,\u201d he added.<\/p>\n Read Next: Wall Street’s $12B Real Estate Manager Is Opening Its Doors to Individual Investors \u2014 Without the Crowdfunding Middlemen<\/a><\/p>\n Photo by wee dezign on Shutterstock<\/p>\n Up Next: Transform your trading with Benzinga Edge’s one-of-a-kind market trade ideas and tools. Click now to access unique insights<\/a> that can set you ahead in today’s competitive market.<\/p>\n Get the latest stock analysis from Benzinga:<\/p>\n This article Why ‘Cheap’ Software Stocks Could Be The Next Big AI Value Trap<\/a> originally appeared on Benzinga.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Enterprise software stocks are starting to look tempting again, at least on a chart. Adobe Inc. (NASDAQ:ADBE) is…\n","protected":false},"author":2,"featured_media":257943,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[6861,220,218,219,18607,128284,61,60,128282,11143,6864,128283,80],"class_list":{"0":"post-257942","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-adobe-inc","9":"tag-ai","10":"tag-artificial-intelligence","11":"tag-artificialintelligence","12":"tag-enterprise-software","13":"tag-everyday-investors","14":"tag-ie","15":"tag-ireland","16":"tag-jordi-visser","17":"tag-micron-technology-inc","18":"tag-salesforce-inc","19":"tag-software-stocks","20":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/257942","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=257942"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/257942\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/257943"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=257942"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=257942"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=257942"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}} <\/p>\n