Hedge funds increase short positions against software stocks
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4d ago
0mins
Should l Buy ASAN?
Source: CNBC
Asana Inc. has hit a 52-week low, reflecting broader challenges in the software sector.
The decline comes amid a significant downturn in the software industry, with hedge funds profiting from short positions, leading to a $1 trillion drop in market value. The iShares Expanded Tech-Software ETF has fallen 8% this week, indicating a lack of investor confidence in software stocks, including Asana.
This trend suggests that Asana may continue to face pressure as investor sentiment remains negative towards the software sector.
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Analyst Views on ASAN
Wall Street analysts forecast ASAN stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ASAN is 15.70 USD with a low forecast of 11.00 USD and a high forecast of 19.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
11 Analyst Rating
3 Buy
6 Hold
2 Sell
Hold
Current: 8.460
Low
11.00
Averages
15.70
High
19.00
Current: 8.460
Low
11.00
Averages
15.70
High
19.00
About ASAN
Asana, Inc. is an enterprise work management software platform. It enables organizations to align work to goals, coordinate cross-functional work, gain visibility into progress, automate workflows across departments, and scale work securely. It offers two products within the Asana platform to meet the needs of diverse organizations. The Asana platform maintains an application programming interface that enables developers to build apps on Asana and integrate with hundreds of third-party applications like Microsoft Teams, Slack, Jira, Salesforce, Google Workspace, Adobe Creative Cloud and many more. Its flagship product, Asana Work Graph, provides a map of how all work gets done inside an organization. It is built for scale and captures the relationship between the work that teams undertake, the information about that work, the people doing the work, and the outcomes of that work. It provides interactive dynamic views list, calendar, board, timeline, goals, portfolio, reports and more.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Hedge Funds Ramp Up Short Bets Against Software Stocks
- Surge in Short Bets: Hedge funds have made a $24 billion profit from shorting software stocks this year, coinciding with a $1 trillion decline in the industry's overall market value, indicating a growing pessimism towards the software sector.
- Market Turmoil Intensifies: The iShares Expanded Tech-Software ETF (IGV) has dropped 8% this week, bringing its year-to-date losses to over 21%, and a 30% decline from its all-time high last September, reflecting waning investor confidence in the software industry.
- Expectations of Structural Change: Investors increasingly believe that the software sector may be undergoing a
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Salesforce CEO Marc Benioff Warns of AI Threats as Stock Drops 14%
- Market Decline: The WisdomTree Cloud Computing Fund has dropped over 8% this year, with major software firms like Salesforce, ServiceNow, and Adobe seeing stock declines exceeding 14%, indicating heightened market concerns that could trigger a wave of acquisitions.
- AI Competitive Pressure: The launch of Anthropic's AI tool Cowork aimed at enterprise customers has shaken investor confidence in software vendors, raising fears that AI could replace critical functions traditionally handled by software, prompting mid-sized firms to seek financing options to navigate these challenges.
- Acquisition Opportunities: Thoma Bravo co-founder Orlando Bravo highlighted that now presents incredible buying opportunities, particularly for companies developing AI solutions that integrate with existing systems, reflecting strong market demand for AI integration.
- Strategic Adjustments: Analyst Rishi Jaluria noted that the recent pullback in software stocks may force certain companies to explore strategic alternatives, especially those lacking effective AI integration, suggesting that future deals will need compelling AI angles to attract investor interest.
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- Market Downward Pressure: Cloud software stocks like Salesforce, ServiceNow, and Adobe have dropped over 14% at the start of 2025, while the WisdomTree Cloud Computing Fund has fallen more than 8% year-to-date, indicating increasing market concerns about the software sector.
- Increased Acquisition Opportunities: Orlando Bravo, co-founder of private equity firm Thoma Bravo, noted that there are “incredible buying opportunities” right now, which may lead mid-sized software companies to seek financing and potentially trigger a wave of acquisitions.
- Escalating AI Threats: The launch of AI agent tools has heightened investor anxiety about the software industry's future, with analysts highlighting significant risks for companies like Monday.com, Asana, and Sprout Social, which may be forced to explore strategic alternatives.
- Poor Market Reactions: Despite Salesforce CEO Marc Benioff claiming the latest quarter was the “best of their careers,” the market response has been tepid, with ServiceNow's shares dropping 17% over a week, reflecting investor skepticism towards companies lacking an AI strategy.
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- Amazon Price Target Cut: Raymond James lowers Amazon's price target from $275 to $260, yet remains optimistic heading into Q4, believing robust holiday trends and advertising performance will support earnings, with the AI narrative likely influencing stock performance.
- Cautious Netflix Outlook: Wedbush reduces Netflix's price target from $140 to $115 due to disappointing Q3 results and Q4 guidance, reflecting market concerns about its future growth trajectory.
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- Stock Price Surge: Asana's shares rose approximately 4% in premarket trading on Thursday, reflecting investor confidence in the new leadership's ability to improve sales and marketing spend efficiency, particularly under the new CEO and CFO.
- AI Growth Potential: Analysts estimate that Asana's AI Studio will contribute an additional point of growth to Annual Recurring Revenue (ARR) in fiscal year 2027, highlighting the company's strategic positioning in the AI sector to drive future revenue growth.
- Positive Market Feedback: Early conversations with implementation partners suggest strong interest in AI Studio and positive feedback on delivered ROI, indicating Asana's differentiated competitive advantage in the generative AI tools market.
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- Surge in Short Bets: Hedge funds have made a $24 billion profit from shorting software stocks this year, coinciding with a $1 trillion decline in the industry's overall market value, indicating a growing pessimism towards the software sector.
- Market Turmoil Intensifies: The iShares Expanded Tech-Software ETF (IGV) has dropped 8% this week, bringing its year-to-date losses to over 21%, and a 30% decline from its all-time high last September, reflecting waning investor confidence in the software industry.
- Expectations of Structural Change: Investors increasingly believe that the software sector may be undergoing a
See More
Salesforce CEO Marc Benioff Warns of AI Threats as Stock Drops 14%
- Market Decline: The WisdomTree Cloud Computing Fund has dropped over 8% this year, with major software firms like Salesforce, ServiceNow, and Adobe seeing stock declines exceeding 14%, indicating heightened market concerns that could trigger a wave of acquisitions.
- AI Competitive Pressure: The launch of Anthropic's AI tool Cowork aimed at enterprise customers has shaken investor confidence in software vendors, raising fears that AI could replace critical functions traditionally handled by software, prompting mid-sized firms to seek financing options to navigate these challenges.
- Acquisition Opportunities: Thoma Bravo co-founder Orlando Bravo highlighted that now presents incredible buying opportunities, particularly for companies developing AI solutions that integrate with existing systems, reflecting strong market demand for AI integration.
- Strategic Adjustments: Analyst Rishi Jaluria noted that the recent pullback in software stocks may force certain companies to explore strategic alternatives, especially those lacking effective AI integration, suggesting that future deals will need compelling AI angles to attract investor interest.
See More
Software Stocks Decline, Investors Eye Acquisition Opportunities
- Market Downward Pressure: Cloud software stocks like Salesforce, ServiceNow, and Adobe have dropped over 14% at the start of 2025, while the WisdomTree Cloud Computing Fund has fallen more than 8% year-to-date, indicating increasing market concerns about the software sector.
- Increased Acquisition Opportunities: Orlando Bravo, co-founder of private equity firm Thoma Bravo, noted that there are “incredible buying opportunities” right now, which may lead mid-sized software companies to seek financing and potentially trigger a wave of acquisitions.
- Escalating AI Threats: The launch of AI agent tools has heightened investor anxiety about the software industry's future, with analysts highlighting significant risks for companies like Monday.com, Asana, and Sprout Social, which may be forced to explore strategic alternatives.
- Poor Market Reactions: Despite Salesforce CEO Marc Benioff claiming the latest quarter was the “best of their careers,” the market response has been tepid, with ServiceNow's shares dropping 17% over a week, reflecting investor skepticism towards companies lacking an AI strategy.
See More
RBC Initiates Coverage on Nvidia with $240 Price Target
- Nvidia's Positive Outlook: RBC initiates coverage on Nvidia with a price target of $240, citing a backlog exceeding $500 billion and surging enterprise AI demand as key drivers for stock upside, indicating strong market potential.
- Amazon Price Target Cut: Raymond James lowers Amazon's price target from $275 to $260, yet remains optimistic heading into Q4, believing robust holiday trends and advertising performance will support earnings, with the AI narrative likely influencing stock performance.
- Cautious Netflix Outlook: Wedbush reduces Netflix's price target from $140 to $115 due to disappointing Q3 results and Q4 guidance, reflecting market concerns about its future growth trajectory.
- Boeing Price Target Increase: Bernstein raises Boeing's price target from $277 to $298, expressing increasing confidence in the company's growth path for 2026, highlighting its strong position in the aerospace and defense sector.
See More
Citi Upgrades Asana (ASAN) to Buy/High Risk, Maintains $16 Price Target
- Rating Upgrade: Citi upgraded Asana's rating from Neutral/High Risk to Buy/High Risk while maintaining a $16 price target, indicating a positive outlook on the company's future performance.
- Stock Price Surge: Asana's shares rose approximately 4% in premarket trading on Thursday, reflecting investor confidence in the new leadership's ability to improve sales and marketing spend efficiency, particularly under the new CEO and CFO.
- AI Growth Potential: Analysts estimate that Asana's AI Studio will contribute an additional point of growth to Annual Recurring Revenue (ARR) in fiscal year 2027, highlighting the company's strategic positioning in the AI sector to drive future revenue growth.
- Positive Market Feedback: Early conversations with implementation partners suggest strong interest in AI Studio and positive feedback on delivered ROI, indicating Asana's differentiated competitive advantage in the generative AI tools market.
See More
ServiceNow to Acquire Cybersecurity Startup Armis for $7.75 Billion
- Acquisition Announcement: ServiceNow revealed plans to acquire cybersecurity startup Armis for $7.75 billion, with the deal expected to close next year, aimed at enhancing its cybersecurity offerings and strengthening market competitiveness.
- Stock Price Reaction: Following the acquisition announcement, ServiceNow's shares fell nearly 3%, reflecting market concerns over the high acquisition cost, which may impact the company's short-term financial performance.
- Mining Stocks Rally: With gold, silver, and copper prices hitting record highs, mining stocks such as Freeport McMoRan, Foran Mining, and Taseko Mines rose nearly 3%, indicating optimistic market sentiment towards mining investments.
- Novo Nordisk Drug Approval: Novo Nordisk's GLP-1 pill received FDA approval, leading to an 8% increase in its stock price, providing a new oral treatment option for obesity patients, which could drive future sales growth for the company.
See More
