Adobe (NASDAQ: ADBE) shares have plunged by more than 40% year to date.
The stock trades below $200, a far cry from when the stock nearly touched $700 per share
Artificial intelligence is on most investors’ minds, especially with how easy it is to create images with AI tools. However, this fear has resulted in an unreasonably low valuation for a company that is still growing. Addressing the AI concern Software stocks sold off broadly amid concerns that artificial intelligence would replace software businesses, rendering them obsolete.
Claude’s Cowork demonstrated that its generative AI could replace software. While it’s a major AI innovation, it’s easy for investors to overestimate how quickly new technology will move and whether existing software businesses will become obsolete. Adobe isn’t the only software stock that has tumbled amid fears that SaaS companies may no longer be needed.