Key Points
Atlassian, C3.ai, and SoundHound AI have all dropped more than 50% in six months.
The market fears that all-in-one AI platforms will make traditional software obsolete.
SoundHound AI's specialized voice technology isn't something general-purpose chatbots can easily replicate.
- 10 stocks we like better than SoundHound AI ›
If you own software stocks, the stock market hasn't been much fun in recent times. As of April 27, Atlassian (NASDAQ: TEAM) is down 58% over the last six months. C3.ai (NYSE: AI) dropped 52%. SoundHound AI (NASDAQ: SOUN) took a 55% price cut. The market has decided that I-can-do-everything artificial intelligence (AI) platforms are coming for these companies, and investors are not waiting around to see how things play out.
Here's the thing: The market might be overreacting. Not just a little. I mean, a whole lot.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
The Great Repricing
The thesis behind the sell-off is straightforward: AI will commoditize software. In particular, generative AI will eat the current software industry. Why pay Atlassian for project management when an AI agent can just...manage projects? Why license a next-generation database when AI can conjure data from the ether?
The logical endpoint of this thinking is that every software-as-a-service (SaaS) company becomes obsolete, replaced by a single prompt box that does everything. That single system might get expensive, but that's OK as long as it can replace a plethora of older software solutions.
Image source: Getty Images.
Investors, not wanting to be the last ones holding the bag, have fled. Money rotated into AI infrastructure (memory-chip maker Micron Technology (NASDAQ: MU) gained 154% over the same period while chip titan Intel (NASDAQ: INTC) rose 130%) and out of anything that looked like it might be on the hungry AI monster's menu.
SaaS valuations collapsed. The baby went out with the bathwater, and the bathwater went out with the tub.
Why reports of their death are exaggerated
AI will absolutely change the software industry. But it won't vaporize companies that are building durable competitive advantages. Consider what these beaten-down names actually offer:
- Atlassian isn't waiting around to be disrupted. It's baking AI into Jira and Confluence, making its project management and collaboration tools smarter rather than obsolete. More importantly, try telling a 10,000-person engineering org to switch project management systems. You'll need more than a clever chatbot to pull that one off.
- C3.ai is in the business of helping enterprises deploy AI. The "AI will kill software" narrative doesn't land when your software is AI infrastructure. That's like saying cars will kill the highway system. If anything, C3.ai should thrive as enterprise-scale AI takes off.
- SoundHound AI builds voice AI for drive-thrus, phone menus, and car dashboards. This market isn't something ChatGPT is coming for; it's specialized, real-time, edge-deployed tech with actual paying customers.
The market is treating these stocks like the generative AI disruption has already happened. It hasn't. What has happened is that you can now buy these growth stories at half price or less. The businesses haven't changed; the sentiment has.
That's not a crisis. It's a clearance sale. I recommend taking another look at the best SaaS names while they're trading on the cheap. All three are top-notch ideas, but I would honestly check out SoundHound AI first.
Should you buy stock in SoundHound AI right now?
Before you buy stock in SoundHound AI, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and SoundHound AI wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $492,752!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,327,935!*
Now, it’s worth noting Stock Advisor’s total average return is 991% — a market-crushing outperformance compared to 201% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of April 28, 2026.
Anders Bylund has positions in Intel, Micron Technology, and SoundHound AI. The Motley Fool has positions in and recommends Atlassian, Intel, Micron Technology, and SoundHound AI. The Motley Fool recommends C3.ai. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
