In this article, we will list the 5 Stocks That Will Collapse Because of AI. This series is part of our full list of 10 Stocks That Will Collapse Because of AI, which contains the methodology we used to come up with and rank these stocks.

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. (NYSE:NOW) 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. (NYSE:NOW) 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. (NYSE:NOW) 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. (NASDAQ:UPWK), 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. (NASDAQ:UPWK), 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. (NASDAQ:UPWK) 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. (NASDAQ:UPWK) 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. (NASDAQ:GTLB) 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. (NASDAQ:GTLB) 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. (NYSE:U) 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. (NYSE:U) 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. (NYSE:U) 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. (NYSE:HUBS) 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. (NYSE:HUBS) 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.

READ NEXT: 8 Best American Stocks to Buy and Hold in 2026 and 12 Best Mid Cap AI Stocks to Buy According to Hedge Funds.

Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.