Software-as-a-service stocks declined sharply last week. The sell-off followed Anthropic's release of a preview for its new Cowork feature.
Cowork expands the capabilities of Claude Code, Anthropic's AI coding assistant, to handle non-coding tasks. It can directly access files on a user's computer, perform web searches, and complete various assignments. This development is seen as a significant move toward creating a functional digital assistant.
Concerns about AI reshaping the software sector have existed for some time. Microsoft CEO Satya Nadella stated in late 2024 that "SaaS is dead." A late 2025 IDC forecast suggested the standard per-user, per-month SaaS pricing model would become outdated by 2028, potentially forcing 70% of software providers to change their pricing structures. Cowork offers a glimpse of a future where AI agents interact with applications and data directly.
The stock market reaction has been pronounced, but some investors are searching for opportunities within the turmoil. Two SaaS companies mentioned are Paycom and UiPath.
Paycom, a payroll software provider, introduced its Beti platform in 2021. Beti allows employees to manage their own payroll, reducing errors and saving time for employers. This innovation initially slowed the company's overall revenue growth but provided significant value to clients.
CEO Chad Richison called the mid-2025 launch of IWant, an AI product that lets users query their data via voice or text, "the biggest release since our founding in 1998." Paycom's stock price has fallen over 70% from its late 2021 peak and is down more than 40% from its 52-week high. Third-quarter 2025 sales increased 9% year-over-year, with the company maintaining a GAAP net income margin of 22%.
A potential risk for Paycom is AI's indirect effect on the job market; slower hiring or layoffs could negatively impact its business.
UiPath, a leader in robotic process automation, faces warnings from tools like Cowork. The company's strategy involves combining RPA with AI. CEO Daniel Dines said on a recent earnings call that this approach "continues to align with what customers want most: trusted enterprise-grade automation that delivers tangible ROI fast."
UiPath's latest quarterly revenue grew 16% year-over-year, with a dollar-based net retention rate of 107%. The company sells results rather than just software.
Market analysts have noted other investment options. The Motley Fool Stock Advisor team listed ten stocks they consider better buys than Paycom Software, though Paycom and UiPath were not on that list.