Under the impact of AI, there is a lack of short-term growth catalysts in the industry. Citigroup has downgraded several software stocks including DocuSign (DOCU.US).

Against the backdrop of the continued evolution of artificial intelligence, Citigroup has recently downgraded the ratings of multiple application software companies, believing that the structural pressure brought by AI in the coming months may further intensify. The companies that have been downgraded include Similarweb (SMWB.US), DocuSign (DOCU.US), Autodesk (ADSK.US), NICE Ltd (NICE.US), CCC Intelligent Solutions (CCC.US), and Veeva Systems (VEEV.US), with ratings downgraded from "buy" to "neutral". As a result, the stock prices of these companies generally declined on Friday. Citigroup analysts pointed out that the fundamentals of these companies remain solid, with bright long-term prospects, but they lack clear growth catalysts in the next 12 months. Therefore, they recommend investors to adopt a more cautious and selective allocation strategy. At the same time, Citigroup also simultaneously lowered the target prices of the relevant companies: from $8.5 to $3 for Similarweb, from $99 to $50 for DocuSign, from $331 to $246 for Autodesk, from $184 to $119 for NICE, from $10 to $6 for CCC, and from $291 to $176 for Veeva, with significant decreases overall. The report points out that market concerns about the software industry mainly focus on three aspects: whether the application architecture is adaptable to the AI era, the sustainability of the business models, and the downside risks facing long-term valuations. More importantly, private AI companies are expected to generate over $100 billion in revenue in the next few years, significantly exceeding the additional contract value scale of traditional application software of around $500 billion. Although enterprise AI budgets are currently more about "incremental investments" rather than replacements, research shows that enterprises are increasing the optimization of software costs and supplier integration efforts, which could pose potential pressure on traditional software vendors.