Multiple software stocks took hits in Monday afternoon’s trading session, all after Piper Sandler took a look at the broader market and discovered it unpalatable on several fronts. Alteryx (NYSE:AYX) was hit hardest, down nearly 6% at one point, and not far behind were Matterport (NASDAQ:MTTR) and Unity Software (NYSE:U), down nearly 4% and 2%, respectively. Salesforce (NYSE:CRM) got off comparatively lightly, down fractionally, while Asana (NYSE:ASAN) managed to buck the trend and turn fractionally green in the afternoon session.
The reasons for the declines vary from issue to issue, but the underlying thread remains clear: Piper Sandler has concerns about the entire sector. Brent Bracelin offered up an investor note on several stocks, noting concerns over estimates for all of 2024, the risk of an “airpocket” in the sector as AI takes center stage over literally everything else in the software sector, and concerns about what was called an “erosion” in the market in September.
Bad news in the macro, but then Bracelin pointed out issues in individual stocks as well. Bracelin noted that Salesforce took a downgrade from Overweight to Neutral over issues that it may not be readily able to monetize artificial intelligence. Unity, meanwhile, made the same drop after the emergence of its developer troubles over new pricing schemes. Asana dropped from Neutral to Underweight as concerns about renewal rates popped up. In addition, Alteryx slipped from Neutral to Underweight over concerns that a recovery in 2024 may not materialize, and Matterport dropped from Overweight to Neutral over excessive optimism in its forecast.
Which Software Stocks are a Good Investment?
Turning to Wall Street, ASAN stock has the lightest upside potential. This Hold-rated stock offers investors 17.33% upside potential on an average price target of $21.67. Meanwhile, MTTR stock, also a Hold, offers 120.78% upside potential on its average price target of $4.25.
