Bargain Alert: 2 Brand-Name Software Stocks Trading at Decade Lows

Adobe and Microsoft shares have fallen sharply, creating potential buying opportunities for investors.

Apr. 16, 2026 at 11:36am

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An extreme close-up of a complex array of interlocking gears and industrial components, conveying the robust, secure nature of financial institutions.The heavy, tangible machinery of the financial sector continues to power forward, even as software stocks face market turbulence.San Jose Today

A bifurcation between software stocks and the broader S&P 500 index has created bargain opportunities for investors willing to seek them out. Two brand-name software companies, Adobe and Microsoft, have seen their shares plunge in recent months due to concerns about the impact of artificial intelligence, even as their underlying business fundamentals remain strong.

Why it matters

The steep declines in Adobe and Microsoft's stock prices, despite their continued strong financial performance, suggest these software giants may be undervalued. For investors looking to capitalize on the market's software selloff, these two companies could represent compelling long-term investment opportunities.

The details

Adobe's shares have fallen 46% from their 52-week high, primarily due to fears that AI could reduce demand for its high-margin software platforms. However, the company's AI-first annual recurring revenue more than tripled in its latest quarter, and its subscription revenue jumped 13%. Microsoft's shares have lost nearly a third of their value since late October, also on concerns about AI's impact on enterprise software sales. But Microsoft's latest quarterly results showed 15% constant-currency sales growth, led by its cloud computing and AI-driven segments.

  • Adobe reported its fiscal first-quarter results on February 27, 2026.
  • Microsoft reported its fiscal second-quarter results on December 31, 2025.

The players

Adobe

A leading software company known for its creative and professional tools like Photoshop, Illustrator, and Acrobat.

Microsoft

A multinational technology company and one of the world's largest software and computing companies, known for products like Windows, Office, and Azure cloud services.

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What’s next

Investors will be closely watching for any further updates on how Adobe and Microsoft are navigating the AI landscape and integrating the technology into their respective platforms.

The takeaway

The steep declines in Adobe and Microsoft's stock prices, despite their continued strong financial performance, suggest these software giants may be undervalued. For investors willing to look past the current AI-driven market concerns, these two companies could represent compelling long-term investment opportunities.