Key Points
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While many stocks did well in 2026, those involved in software have come under tremendous pressure.
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Intuit, Adobe, and Workday were the most beaten-down stocks on the Nasdaq-100 at the midway point of the year.
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While their fundamentals remain strong, investors are concerned about how artificial intelligence (AI) might disrupt their businesses.
- 10 stocks we like better than Intuit ›
The first half of 2026 is in the books, and it’s been a fairly strong year for the markets thus far. Both the Nasdaq and the S&P 500 are well into positive territory with gains of about 11% and 9%, respectively.
However, there are also plenty of stocks that have been struggling. The Nasdaq-100 index features the top stocks on the Nasdaq, but the three worst performers at the halfway mark are down considerably, more than 35%. Intuit (NASDAQ: INTU), Adobe (NASDAQ: ADBE), and Workday (NASDAQ: WDAY) have been the worst three stocks on the index. They’re down big and might be enticing options for bargain hunters, but can they recover in the second half and be good buys today?
Intuit
Software stocks have taken a beating this year, with Intuit among the most battered. Year to date, it’s down close to 60% as investors appear to be in panic mode. The company, known for its accounting and tax software, has seen its market cap fall to about $75 billion and now trades at roughly 17 times trailing earnings.
This is an example of where I think investors are overreacting due to the perceived threats of artificial intelligence (AI). While AI can disrupt many industries, whether people will trust it with sensitive information, such as tax and finance, is a big leap, one that is by no means a sure thing. AI’s biggest shortcoming is a lack of trust and the ability to consistently provide users with reliable, accurate information. This is where Intuit’s software products still possess significant value.
The company generated 10% revenue growth in its most recent quarter (for the period ending April 30) and also raised its full-year guidance. Intuit’s business isn’t in as much danger as the stock’s sell-off might have you believe. At such a low valuation, the tech stock could be an attractive buy right now, particularly for long-term investors willing to be patient. While a rally may not be coming in the second half, it could still possess tremendous upside in the long run.
Adobe
Another software stock that’s down big is Adobe. It has fallen 37% through the first six months of the year. Its decline may have been even steeper if not for its struggles in the past; over the past five years, it has declined by about 63%.
The one thing AI is really good at is creating images, and that’s Adobe’s bread and butter, as its Photoshop software is known for high-quality editing. Professionals rely on its software, and here, too, I can’t help but wonder if there is an overreaction to AI. While AI can make images easily, it can also be challenging to make an image look precisely as needed. To make specific edits, there may still be a need for a trusted photo-editing software such as Photoshop.
Adobe’s revenue still rose by 13% in its May quarter, as it has been using AI to drive growth by incorporating it into its software to help add value for users. At a lowly 13 times earnings, the stock is heavily discounted and even offers an attractive margin of safety. At such a discount, it may be too cheap to pass up on the stock, as its fundamentals remain sound. A catalyst, however, may not be around the corner, and so while the stock may rally in the long run, a big surge may not necessarily happen in the second half.
Workday
Workday was the third-worst-performing stock on the Nasdaq-100 as of the halfway mark of 2026, performing only slightly better than Adobe but still down around 37%. Businesses use the company’s cloud platform to manage their operations, and it, too, uses AI and machine learning to help customers automate processes and workflows.
While the stock has declined this year, its valuation isn’t as cheap as the others on this list; its price-to-earnings multiple is over 40. That is a bit rich for a company whose growth rate was just under 14% in its most recent quarter. AI is a bit complicated here, as it is both an opportunity and a risk for Workday: it can improve its operations and make it easier for its customers to do the same.
However, I believe trust remains a major issue, and many businesses are likely to continue feeling most comfortable using Workday to safeguard their data, with or without AI. But with its high valuation, I’m least confident there will be a turnaround for the stock in the near future, as there may still be more room for it to decline.
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David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Adobe, Intuit, and Workday. The Motley Fool recommends Nasdaq and recommends the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy.
