Piper Sandler lowered the target prices of more than ten software stocks such as Adobe (ADBE.US) in batches, warning that AI triggered "structural bearish"

Zhitong Finance APP learned that investment institution Piper Sandler downgraded three enterprise software stocks on Tuesday and lowered the target prices of many companies. Current investors' sentiment towards this sector continues to be cold.

The company's analysts wrote in a report to clients: "The bearish logic can be simplified into two points: First, the improved efficiency of AI will inhibit or reduce the growth of the number of employees in enterprises, which poses a headwind to software companies that charge per seat;

Second, the'natural language programming '(Vibe coding) capability launched by leading large language model providers means that customers will be able to create their own applications instead of purchasing them from existing software vendors. "

The analyst added, "2026 is expected to be the fifth consecutive year of slowing growth in the software industry. Slowing growth and long-term disintermediation concerns have pushed companies on our coverage list to experience valuation downgrades."

Piper Sandler willAdobe(ADBE.US),Freshworks(FRSH.US) and Vertex (VERX.US) downgraded their ratings from "overweight" to "neutral", and significantly lowered their price targets from $479, $20 and $32 to $330, respectively. $12 and $20.

The agency also downgraded Amplitude (AMPL.US), Asana (ASAN.US), BlackLine (BL.US), Braze (BRZE.US), Figma (FIG.US),HubSpot(HUBS.US),SAIFTS(CRM.US), Oracle (ORCL.US), Klaviyo (KVYO.US), monday.com (MNDY.US),ServiceTitan(TTAN.US) and ZoomInfo (GTM.US).

While the market continues to be pessimistic about the software sector, analysts add they remain bullishMicrosoftAnd ServiceTitan, and listed them as two top picks for 2026, even though the tech industry is still in the "early stages of the AI product climb."

"We think Microsoft may be the best pure target in the current AI application field," the analyst wrote. "Our survey of CIOs in the second half of 2025 shows that respondents' views on Azure and Copilot activity are becoming more positive. We recommend buying in the pullback following Microsoft's second-quarter fiscal 2026 results."

The analyst added: "For ServiceTitan, numerous growth drivers (such as Max/Pro products, commercial business, roofing, new industry expansion) give us confidence that its fiscal year 2027 revenue is likely to exceed expectations."