10 Stocks That Will Collapse Because of AI

In this article, we will explore the 10 Stocks That Will Collapse Because of AI.

The tug-of-war between sentiment and fundamentals is unlikely to recede, given the way global politics is shifting. 2026 could well be dominated by fearful retail investors struggling to find opportunities in the negativity. Artificial Intelligence continues to dominate retail investors’ interest, and it is exactly here that strong fundamentals and sentiment, both positive and negative, continue to wrestle for attention.

That said, markets continue to rise on strong fundamentals. Earnings growth estimates for the S&P 500 companies now stand at 17%, up from the prior 15%. This is exactly what JPMorgan Asset Management Global’s Meera Pandit pointed out while talking to CNBC a couple of weeks ago:

“If you look at the fundamentals within the economy, you see earnings estimates for the S&P 500 going from 15% coming into the year to now 17%…”

She also rightly points out that AI is now moving from the infrastructure layer to applications, which is what’s causing some of the negative sentiment. Many industries are trying to come to terms with the fact that modern AI models are leaving most of their workforce redundant. Some stocks, especially those in the software industry, have already taken a beating, while others are slowly coming to the same realization. This is why we decided to compile a list of stocks that will collapse because of AI.

Our Methodology

To come up with our list of 10 stocks that will collapse because of AI, we looked at industries that are most at risk from the emergence of artificial intelligence technologies. These are usually companies that rely on commoditized data, which AI can now offer for free, whose business model collapses because their customers can now do most of their work using AI, or firms that simply cannot afford to build the capital-intensive AI infrastructure and may thus be left behind. Once we had a list of such stocks, we selected the 10 companies that had lost the most value so far this year, mainly due to fears of AI disruption.

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Note: All share price data in the article is as per market close on April 21.

10. Okta, Inc. (NASDAQ:OKTA)

On April 15, Raymond James analyst Adam Tindle upgraded Okta, Inc. (NASDAQ:OKTA) from Market Perform to Outperform and set a price target of $85. The firm’s price target implies a further 17% upside from the current levels. The firm noted that the stock has fallen sharply, from around $200 in fiscal 2023 to $72 today. This drop has been driven by a slowdown in net revenue retention, which decreased from over 120% to 106%, mainly due ot smaller renewals from customers that have overprovisioned during the COVID period. However, the analyst expects this pressure to ease over time, as the company’s average contract duration is just under three years.

Raymond James also said its analysis of key metrics points to a favorable “forward waterfall,” which could support a recovery in growth. Moreover, the firm sees AI as a potential long-term driver, with the ability to expand OKTA’s total addressable market as AI agents become more widely used in the workforce.

On the same day, KeyBanc analyst Eric Heath cut the firm’s price target on Okta, Inc. from $100 to $95 while maintaining an Overweight rating. The firm said its first-quarter channel checks were mixed due to AI disruptions, geopolitical uncertainty, and higher costs. It also pointed to a weaker 2026 budget outlook and softer U.S. demand. The firm noted that nearly 20% of partners are shifting spending toward AI-native solutions, adding pressure on future software demand. The mixed views from the analysts highlight a divided outlook on Okta, Inc..

Okta, Inc. is an identity partner operating in the United States and around the world. The company offers Single Sign-on,  Adaptive MFA, API Access Management, Access Gateway, Okta Device Access, and Universal Directory. It was founded in 2009 and is based in San Francisco, California.

9. Shopify Inc. (NASDAQ:SHOP)

On April 6, Wells Fargo cut its price target on Shopify Inc. (NASDAQ:SHOP) from  $191 to $166 while reaffirming an Overweight rating on the shares. The firm’s downward-adjusted price target implies a further 26% upside from the current levels. This is the second time this year that the firm has lowered its price target on the stock. Earlier in February, it had already cut its price target on the shares from $198 to $191, reflecting growing caution.

According to the firm, the rise of agentic commerce may not develop as quickly or smoothly as expected, suggesting earlier assumptions on adoption were slightly optimistic. However, it remains confident that Agentic commerce will gain traction over time, with Shopify Inc. positioned as a key beneficiary.

Although AI-related concerns remain, Shopify Inc. is working to address them by turning AI into an opportunity. On March 24, the company launched a new feature that allows merchants to sell products directly through ChatGPT using its Agentic Storefront. This move is part of the company’s wider strategy to connect with AI platforms, expanding product discovery across tools like Microsoft Copilot and Google Gemini.

Commerce Product Lead at OpenAI, Neel Ajjarapu, commented:

This is a major step forward as we make ChatGPT the best personal shopping super assistant, while ensuring merchants remain in control of their customer experience.

Shopify Inc. operates as an e-commerce technology company across the United States, Asia-Pacific, Canada, the Middle East, Europe, Africa, and Latin America. The company offers tools to run, scale, market, and start online businesses of different sizes.

8. Adobe Inc. (NASDAQ:ADBE)

In April, 3 financial services firms cut their price targets for Adobe Inc. (NASDAQ:ADBE). Starting with the latest update on April 16, Keith Weiss from Morgan Stanley lowered the firm’s price target on the stock from $425 to $365 while keeping a Hold rating. The firm’s downward-adjusted price target suggests further 44% upside from the current levels. On the same day, RBC Capital analyst Matthew Swanson also lowered the firm’s price target on Adobe Inc. from $400 to $350 and maintained a Buy rating on the shares. The recent shift in analyst sentiment, paired with the stock’s underperformance over the last year and this year, highlights that risks remain.

Earlier, on April 13, BTIG analyst Nick Altmann started coverage of Adobe Inc. with a Neutral rating. According to the firm, AI is raising several questions about the future of the creative ecosystem. This is leading to concerns about the company’s long-term revenue growth and margin outlook. The firm also said it needs greater clarity on how artificial intelligence will shape the creative industry and affect Adobe’s financial profile before taking a more positive stance on the stock.

Adobe Inc. is a technology company operating globally. The company operates in the Digital Media, Digital Experience, and Publishing & Advertising segments. It is based in San Jose, California, and was incorporated in 1982.

7. Salesforce Inc. (NYSE:CRM)

Salesforce Inc. (NYSE:CRM) is one of the 10 stocks that will collapse because of AI. One reason for this is that businesses may start using AI tools to handle customer management themselves. This could reduce their need for the company’s CRM software over time. According to a report released on April 17, Truist Financial analyst Terry Tillman reaffirmed a Buy rating on the stock with a price target of $177.60. The firm’s price target reflects about 7% downside from the current levels.

On the same day, Allan Verkhovski from BTIG reiterated a Buy rating on Salesforce Inc. along with a price target of $255. The firm’s price target offers an additional 40% upside from the current levels. BTIG’s optimism is a rare one among analysts. Earlier, on April 14, Piper Sandler analyst Billy Fitzsimmons reduced the firm’s price target on Salesforce Inc. from $250 to $215 while keeping an Overweight rating. The firm said enterprise software is facing pressure in 2026 as AI model providers move up the stack and compete for IT budgets.

Despite this negativity, the firm is actively trying to pivot toward an AI-dominated world, as evidenced by its pricing strategy change last year. The firm moved to charging for the usage rather than the number of seats customers booked, preparing for a world where customers won’t need as many people to manage their workflows. The success of this strategy remains a question mark.

Salesforce Inc. is a global enterprise software company that provides customer relationship management (CRM) and cloud-based business applications across sales, service, marketing, commerce, and data analytics. Its Customer 360 platform, powered by data tools and trusted AI, enables organizations to unify customer data and drive personalized engagement.

6. Snowflake Inc. (NYSE:SNOW)

KeyBanc analyst Eric Heath cut the firm’s price target on Snowflake Inc. (NYSE:SNOW) from $235 to $200 while keeping an Overweight rating on April 15. According to the firm, its first-quarter checks with 36 IT and security channel partners showed mixed trends, as the environment remains challenging due to geopolitical uncertainty, higher component costs, and ongoing AI disruption.

On a more positive note, the percentage of companies beating or at least meeting EPS expectations rose to 88%, up from 81%. However, the broader outlook remains cautious. The expected global IT budget growth for 2026 was lowered to 2.5% from 5.3% in the previous quarter. In addition, U.S. federal demand for the second quarter and the full-year 2026 outlook weakened. KeyBanc highlighted that nearly 20% of partners are seeing a shift in spending away from traditional software toward AI-native solutions.

Earlier, on April 14, Evercore ISI analyst Kirk Materne also cut the firm’s price target on Snowflake Inc. from $225 to $200 while maintaining an Outperform rating. These back-to-back price target cuts reflect cautious analyst sentiment, primarily driven by fears of AI disruption.

Snowflake Inc. provides a cloud-based data platform that helps organizations store, manage, and share data across multiple public clouds. Its platform, called the Snowflake Data Cloud, supports diverse workloads including data engineering, analytics, machine learning, and secure collaboration.

5. ServiceNow Inc. (NYSE:NOW)

TD Cowen analyst Derrick Wood lowered the firm’s price target on ServiceNow Inc. (NYSE:NOW) from $185 to $140 while maintaining a Buy rating on April 16. The firm’s downward-revised price target still reflects a further 37% upside from current levels. The firm said its channel checks continue to point to solid growth trends, with positive signals around AI product adoption, broader platform usage, and large-deal activity.

In addition to TD Cowen, Deutsche Bank cut its price target on ServiceNow Inc. from $180 to $135 while keeping a Buy rating on the stock the same day. According to the firm, the company is controlling what it can as it heads into the first quarter earnings. This reflects a focus on managing factors within its control despite the challenging environment.

The negativity among analysts had already started to build earlier when Mizuho Securities analyst Gregg Moskowitz cut the firm’s price target on ServiceNow Inc. from $190 to $150 on April 14. The price target adjustment came as part of its first-quarter preview for large-cap software companies. Mizuho Securities said its channel checks were broadly positive, with cloud trends and usage data indicating solid performance and AI adoption remaining very strong. However, the firm noted that demand in the cybersecurity segment was mixed. The latest price target cuts further reinforce this more cautious outlook.

ServiceNow Inc. provides cloud-based and AI-embedded end-to-end workflow automation solutions for enterprises. The company is located in Santa Clara, California, and was founded in June 2004 by Frederic B. Luddy.

4. Upwork Inc. (NASDAQ:UPWK)

On April 9, Upwork Inc. (NASDAQ:UPWK) expanded its AI strategy by launching a ChatGPT-integrated app. The app allows businesses to create job posts, describe their project needs, and access Upwork’s talent network. After creating a job post, users are guided to the Upwork marketplace, where its AI agent, Uma, assists with building contracts, defining project scope, and managing workflow. The integration gives access to the company’s global network of over 18 million professionals across 130 work categories and 10,000 skills. It makes hiring faster and more streamlined for businesses of all sizes.

Peter Sanborn, chief business officer at Upwork Inc., commented:

Human expertise paired with AI is transforming work, and this integration brings the Upwork Marketplace directly into one of the tools millions of people use to get work started. You can now quickly progress from an idea in ChatGPT to hiring the right expert on Upwork in just a few steps, turning conversations into real work outcomes.

While the AI integration is a positive step in improving workflow efficiency for Upwork Inc., it also reflects a wider trend of businesses increasingly adopting AI internally. As companies rely more on AI tools rather than external hiring, demand for freelance platforms could decline, creating long-term revenue pressure.

Moreover, analyst sentiment is also negative, as Upwork Inc. saw its price target cut by 8 Wall Street analysts, including UBS and Citizens JMP, a day after the launch of its app. UBS lowered its price target on the stock from $23 to $20, while Citizens JMP reduced its price target from $27 to $22. The others followed a similar pattern, and Wall Street seems convinced that Upwork’s AI plans will not arrest the steep decline that began with the weak Q1 outlook in the previous earnings report.

Upwork Inc. offers workforce solutions and a platform that connects businesses with agencies, freelancers, fractional workers, and payrolled talent. It also provides the Upwork Marketplace. The company was incorporated in 1998 and is based in Palo Alto, California.

3. GitLab Inc. (NASDAQ:GTLB)

Within just one week, GitLab Inc. (NASDAQ:GTLB) has seen three downward target price revisions. Bank of America Securities lowered its price target on the firm from $58 to $27. RBC Capital did the same, lowering its price target from $33 to $25. UBS also cut its price target to $24 from $44. These are alarming downgrades and show how much of a threat AI has become, even for companies that are integrating it within their offerings.

On March 23, William Blair analyst Jason Ader double-downgraded GitLab Inc. from Outperform to Underperform without providing a price target. The firm also downgraded several other infrastructure software stocks, citing rising uncertainty in the sector driven by artificial intelligence. It believes the industry is undergoing a major transition, in which companies will need to rethink their pricing strategies, products, and how they sell to customers. According to the analyst, AI has created ongoing uncertainty in the software space, and this situation is unlikely to improve in the short term. The stock’s downtrend, which began early last year, continues to erode investor returns.

GitLab Inc. develops software tools that support the entire software development process across Asia-Pacific, the United States, and Europe. The company offers GitLab, a single platform for DevSecOps, as well as GitLab Duo Agent Platform. It was incorporated in 2011 and is headquartered in San Francisco, California.

2. Unity Software Inc. (NYSE:U)

At the end of December 2025, Unity Software Inc. (NYSE:U) was trading at around $45, but it dropped to nearly $17 by the end of March 2026. This significant decline was mainly due to AI-related fears. Although the stock has begun to recover, it is still trading approximately 44% below its December 2025 levels. The recent recovery appears to be driven by positive news flow in April.

According to a report released on April 13, Goldman Sachs analyst Eric Sheridan increased the firm’s price target on Unity Software Inc. from $27 to $29. However, he kept a Hold rating on the stock. The firm’s adjusted price target offers a further 14.8% upside from the current levels.

Earlier, on April 8, Unity Software Inc. and Meta Platforms entered into an extended multi-year platform support and enterprise agreement. Under the deal, the company will continue to support META’s VR platform.

Alex Blum, COO, Unity, said:

Meta is the world’s leading VR platform, and we’re proud that Unity powers the majority of its top‑selling VR games. Great content is what makes VR successful. By pairing Meta’s hardware and OS leadership with Unity’s role as the assembly point for interactive content creation, we’re making VR accessible to more developers so they can develop, deploy, and grow their games and business applications on Meta’s VR devices.

Despite the recent positives that have supported sentiment, AI-related risks remain a concern for the company. Increasing AI adoption could reduce demand for traditional development tools. Faster and cheaper content creation may shift developers toward alternative platforms, putting pressure on long-term growth and pricing power.

Unity Software Inc. offers a platform for deploying, developing, and scaling games and interactive experiences across personal computers, mobile phones, consoles, and extended reality devices. Its platform provides artificial intelligence solutions. The company also offers Create Solutions and Grow Solutions.

1. HubSpot Inc. (NYSE:HUBS)

HubSpot Inc. (NYSE:HUBS) is one of the 10 stocks that will collapse because of AI. As adoption of artificial intelligence rises, the company may face increased competition from AI-native tools offering similar features at a lower cost. On April 14, Taylor McGinnis from UBS lowered the firm’s price target on the stock from $325 to $260 while reaffirming a Buy rating. The firm’s adjusted price target suggests a further 20% upside from the current levels.

In addition to UBS, Piper Sandler also cut its price target on HubSpot Inc. while keeping an Overweight rating on the same day. Analyst Billy Fitzsimmons lowered the firm’s price target on the stock from $280 to $260. According to the firm, 2026 has been a challenging year for enterprise software companies. It noted that as frontier AI model providers move up the technology stack, they are increasingly competing with established companies for IT budgets. As a result, investors are starting to reassess long-term valuation multiples across the sector.

Ahead of first-quarter earnings, Piper Sandler lowered its valuation multiples for the group. The recent shift in analyst sentiment reflects growing AI-related concerns that could weigh on the company’s long-term growth.

HubSpot Inc. provides cloud-based customer relationship management software. Its platform includes marketing, sales, service, operations, and a content management system, as well as other tools, integrations, and native payment solutions.

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