Software market under pressure: US government causes price slide!

The US government's current austerity policy has caused considerable unrest in the software market. Loud Finance.ch The share prices of large software companies have fallen sharply since the beginning of the year. The companies affected include ServiceNow, which fell 27% to $774.07, Salesforce, whose shares fell 24% to $255.23, and Adobe, whose share price fell 17% to $367.25 (as of April 3, 2025).

The reasons for this downward trend are varied. On the one hand, there are fears of an economic slowdown. In addition, a restructuring of the US federal authorities was initiated by the “Department of Governmental Efficiency” (DOGE). Another problem is that artificial intelligence (AI) sales increases are falling short of expectations.

Details about the affected companies

ServiceNow derives about 8-9% of its revenue from US federal agencies. Planned staff cuts in these authorities could reduce demand for software licenses in the short term. However, analysts at Bernstein see long-term opportunities for ServiceNow and believe market adjustment could increase demand for productivity software. They also rate ServiceNow as cheap and with the potential to become “the next Microsoft”.

The situation is similar for Adobe. Analysts recognize potential, but are skeptical as ambiguities caused by changes in the reporting structure and pressure from competition are weighing on the shares. A potential recovery could occur if AI recurring revenue targets are met. In contrast, security companies such as Palo Alto Networks and Zscaler are less affected by the US government's cuts. Zscaler was able to record an increase of 6.54% to 192.21 US dollars, while Palo Alto Networks fell by 9% to 165.17 US dollars (as of April 3, 2025).

Salesforce is rated “underperform” by analysts, and while its new “Agentforce” technology raises hopes, it could be years before AI acts as a growth driver. Organic sales growth is also weak.

However, in the global context, the market for artificial intelligence is growing rapidly Statista reported. The rapid development is driven by digital technologies and increasing awareness of AI capabilities. There are particularly high growth rates in the areas of AI robotics, autonomous technologies and machine learning. Consumers are increasingly seeking personalized and efficient AI-driven products as companies seek to streamline their processes and increase efficiency. In China in particular, the AI ​​market is growing due to government support and a large population, but there are concerns about strict government regulations and data protection.