Legacy Software Firms Use Buybacks to Combat AI Fears
Salesforce and Adobe are executing massive share buybacks and rebranding products to reassure investors that artificial intelligence will not disrupt their core business models.
Legacy software companies are employing aggressive financial and branding strategies to counter a crisis of confidence on Wall Street. Investors fear that artificial intelligence will disrupt core business models and are skeptical that AI tools are generating revenue fast enough to offset slowing growth in legacy segments.
Salesforce Inc. has led these efforts by borrowing $25 billion for the largest debt-fueled accelerated share buyback in corporate history. The company is also rebranding flagship products, such as renaming Sales Cloud to Agentforce Sales, to signal deeper AI integration. Adobe Inc. has similarly engaged in massive buybacks to stabilize its valuation.
Other firms are using different tactics to signal stability. Zoom Communications Inc. has utilized AI-generated avatars during earnings calls, while ServiceNow Inc. executives announced they would not sell stock for the foreseeable future. While infrastructure software firms like Microsoft Corp. and Palantir Technologies Inc. have seen some recovery, application-focused vendors continue to struggle with significant market cap losses.
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