Microsoft (MSFT.US) leads while Salesforce (CRM.US) faces pressure: AI is reshaping the software industry

According to Woofun AI, Tyler Radke, co-head of Citibank (C.US), believes that artificial intelligence is dividing the software industry into winners and losers.

Microsoft (MSFT.US), with its Office software monthly fee below $100 and integration of Copilot and security features, has a profit advantage compared to competitors pricing in the hundreds of dollars. As of the quarter ending June 30, its revenue increased by 18%.

Woofun AI compiled data shows that Citibank's survey of chief information officers indicates Microsoft’s self-developed AI models have reached an industry-leading level, driving growth for Microsoft, Palantir (PLTR.US), and Snowflake (SNOW.US). Conversely, Adobe (ADBE.US) is under pressure as enterprise budgets shift toward AI projects. Earlier this year, chip stocks outperformed the best software stocks, but now the situation has reversed.

On Tuesday, Salesforce (CRM.US) announced its acquisition of Braze (BRZE.US) for $47.50 in cash per share. Previously, Salesforce’s share price surged over 20% after its financial report. However, after completing six major acquisitions, organic growth speed has become crucial, and high financing costs are intensifying pressure. Citi analysis points out that the share price decline of new cloud computing AI cloud service providers is due to rising bond yields rather than weak demand. Capacity for 2026 is already fully booked, industry collapse risk is low, and scale will determine survival, with larger companies being more advantageous.

Katie Stockton, founder of Fairlead Strategies, listed wider credit spreads as one of the three major risk signals for the stock market. If financing costs remain high, divergence may intensify, and strategic investors and private equity institutions will target pressured companies for acquisitions.