Tech stocks have been on a tear in 2025, with AI leaders and semiconductor giants driving market gains. Yet not all corners of the sector are benefiting equally. Oracle and two other notable software companies have been lagging behind, even as broader tech shares rally.
So, what’s weighing on these names—and what does it mean for investors?
1. Oracle: Slower Cloud Growth Concerns
Oracle has been working aggressively to expand its cloud infrastructure business, aiming to compete with hyperscalers like AWS, Microsoft Azure, and Google Cloud. While the company has made progress, recent earnings showed slower-than-expected growth in cloud revenue, raising concerns about its ability to capture market share.
The issue isn’t necessarily declining demand—it’s the intense competition and price pressures in the enterprise cloud space. With AI workloads driving demand for infrastructure, investors want to see Oracle grow faster, not just steadily. The disappointment has translated into selling pressure on the stock.
2. Salesforce: Spending Caution Hits CRM Demand
Salesforce, the leader in customer relationship management (CRM) software, is also facing headwinds. Enterprises are becoming more cautious with software spending, prioritizing AI tools and automation over large-scale CRM expansions.
While Salesforce has integrated AI features into its offerings, adoption has been slower than expected, and subscription renewals aren’t accelerating at the same pace as in past years. This cautious spending climate has tempered investor enthusiasm, even as other tech names soar on AI momentum.
3. Adobe: AI Disruption in the Creative Space
Adobe’s creative software suite remains an industry standard, but the rise of AI-driven design tools—some of them free or low-cost—is changing the competitive landscape.
Investors are concerned that generative AI platforms could erode Adobe’s pricing power over time. While Adobe has launched its own AI-powered solutions like Firefly, the market wants stronger evidence that these features will translate into faster revenue growth. The uncertainty has kept the stock under pressure.
Why the Divergence?
The broader tech rally has been heavily concentrated in companies with direct exposure to AI infrastructure and semiconductors. Software companies that aren’t showing immediate, high-growth AI revenue streams are being left behind.
For Oracle, Salesforce, and Adobe, the challenge is proving that their AI strategies can drive meaningful near-term results—not just future potential.
Bottom Line for Investors
While these software giants are facing near-term challenges, their fundamentals remain strong. However, until growth re-accelerates or AI integration delivers tangible results, they may continue to underperform the flashier names in tech.
