Software Firms Deploy Bluster and Buybacks to Counter AI Fears

Software companies are facing a crisis of confidence on Wall Street and trying increasingly aggressive strategies to address it.

The latest example came when Figma Inc. Chief Executive Officer Dylan Field around $46 million in stock awards earlier this month, citing the dilutive impact it would have on shareholders. It echoed actions from ServiceNow Inc. and Intuit Inc. earlier this year — both firms’ executive teams made coordinated announcements that they wouldn’t sell any stock in the foreseeable future.

“A lot of executive teams see what’s happening to their stocks and think — ‘we have no idea what to do,’” said Rishi Jaluria, an analyst at RBC Capital Markets.

In what has come to be known as the SaaSpocalypse, software valuations have melted down over fears that artificial intelligence tools and startups will take some of the business. Across the board, companies have launched their own AI products and argue that they’ll be able to successfully ride the boom.

Next week, executives of industry bellwether Salesforce Inc. are expected to give the latest impassioned defense when the company reports quarterly results. Many industry leaders have struck a newly confrontational tone on such earnings calls.

“You can give us back the market cap,” Bill McDermott, ServiceNow’s famously boisterous CEO, told analysts earlier this year. Perhaps no line better summarizes the typical defense than this one from Oracle’s Larry Ellison in March: “We think the SaaSpocalypse applies to others but not to us.”

Some companies have turned earnings calls into advertising venues for their new products. Since last spring, Zoom Communications Inc. CEO Eric Yuan has delivered remarks via an AI-generated avatar of himself. The smiling replica speaks in a robotic voice and is meant to remind investors of Zoom’s expanded suite of features beyond video. “I’m proud to be among the first-ever CEOs to use an avatar in an earnings call,” Yuan said. Still, Zoom’s shares are down 81% since a late 2020 peak.

By and large, investors don’t believe that legacy software vendors’ AI tools are spurring an increase in revenue quickly enough to counteract potentially slowing growth in their main businesses. Software providers that were among the most-envied companies of the 2010s have now lost nearly half of their market cap from peaks earlier this decade.

One way that Salesforce has responded is making it more difficult to decipher its results. Earlier this year, the company said it would offer less-detailed information about how much revenue comes from specific products. Further muddying the picture, Salesforce changed the names of many of its flagship products to include the label of its AI tool, “Agentforce.” So Sales Cloud — the company’s initial hit software that helps sellers keep track of their contacts and negotiations — is now known as “Agentforce Sales.”

Read More: Salesforce Touts AI Promise Over Reality in SaaSpocalypse Fight

Salesforce isn’t alone in bluntly renaming products to include AI. Oracle’s namesake database became the “Oracle AI Database” in late 2025. Recasting legacy businesses as AI immediately raises red flags for investors, said Jaluria, of RBC. If overall company revenue isn’t accelerating, it is hard to argue a software company is benefiting from AI, he said.

In other cases, companies have tried to signal evolution by swapping their top brass. Adobe Inc. took the unusual step earlier of publicly announcing a CEO search before actually deciding on a successor. Workday Inc. brought back co-founder Aneel Bhusri to just two years after he handed off the reigns to a more sales-focused leader. C3.AI Inc.’s Tom Siebel made a similar return in May less than a year after stepping back from the CEO role.

Some software stocks have begun to recover in recent weeks as the companies showed evidence of revenue acceleration, such as Palantir Technologies Inc., Snowflake Inc. and Microsoft Corp. Still, the rally is largely limited to infrastructure software rather than those making applications, said Tyler Radke, an analyst at Citigroup.

Radke’s advice to management teams? “Don’t try to get too cute — investors can sniff it out.” It’s really about reinvention and building new businesses in the AI era, he said. “There’s nothing you can do in terms of optics and cosmetics.”

Failing that, companies have turned to one of their few reliable tools to make investors happy: buybacks. Salesforce underwent the largest debt-fueled accelerated share buyback in corporate history earlier this year. It borrowed $25 billion to purchase its own stock, with CEO Marc Benioff calling his company’s steep share slide a “great buying opportunity.” Adobe has similarly bought back almost $16 billion of its stock over the last 18 months as the price dropped.

“We’re clearly showing a lot of confidence that we should be using capital allocation to buy back our stock,” Adobe CEO Shantanu Narayen said in June.