Key Points
- The tech sector has rallied significantly in Q2 to become the S&P 500's top-performing sector so far in 2026.
- Despite the wider rally, software companies have faced major year-to-date losses as investors continue to worry about AI's potential encroachment on the industry.
- Viewing their beaten-down stock prices as a value buying opportunity, major software companies like Salesforce ($25 billion), Adobe ($25 billion), and ADP ($6 billion) have authorized massive share repurchase programs.
- Special Report: Trump Issues Emergency Order That Supports Elon Musk's Next Venture
Throughout the first quarter of the year, the tech sector was a laggard as fears of an artificial intelligence (AI) bubble carried over from the selloff that began in October 2025.
But since the start of the second quarter, that corner of the market has rallied—so much so that it has now overtaken energy as the best performer among the S&P 500’s 11 sectors in 2026.
But within tech, there has been one notable omission from the rally: software. As fears over AI’s encroachment on the industry linger, beaten-down stocks operating in that space have amassed some of the worst year-to-date (YTD) losses across the market.
However, management at some software companies are viewing these corrections as a golden opportunity to take advantage of undervalued shares, signaling that they believe the market has mispriced their stocks.
For the following three companies, that is evidenced through enormous share repurchase authorizations that could prove to be prudent decisions in the long term.
Salesforce Announces Its Largest-Ever Stock Buyback
Authorized stock buybacks allow—but do not require—companies to repurchase their own stock. Regardless, San Francisco-based Salesforce (NYSE: CRM) is going all in.
The cloud software company, which focuses on customer relationship management and enterprise applications, announced a share repurchase program on March 16, the largest in its history.
The $25 billion accelerated stock buyback plan accounts for more than 14% of CRM’s shares outstanding.
According to the company’s press release, the plan calls for the repurchase of 103 million shares and “represents the immediate execution of half of the $50 billion aggregate Share Repurchase Program authorized by Salesforce’s Board of Directors in February 2026.”
Those 103 million shares account for approximately 80% of the total shares that the company anticipates repurchasing. From its Jan. 7 YTD high, CRM fell by more than 38% before hitting its YTD low on April 10. Since then, the stock has gained a modest 9.1%.
Of the 39 analysts currently covering Salesforce, 26 have assigned it a Buy rating. Overall, it receives a consensus Moderate Buy rating with an average 12-month price target that implies around 35% potential upside.
Adobe’s Repurchase Plan Aims to Take Advantage of a 5-Year Lull
On April 21, San Jose-based Adobe (NYSE: ADBE) announced a $25 billion stock repurchase authorization that will account for nearly 25% of the company’s shares outstanding.
According to a company press release, Adobe is aiming to return value to shareholders while minimizing dilution.
The plan is a “direct expression of confidence in [Adobe’s] robust cash flow and…long-term value,” says Dan Durn, executive vice president and CFO.
Shareholders are hoping the plan can serve as a shot in the arm for the sluggish stock. After posting a four-year average annual revenue growth rate of 21.31% from 2018 to 2021, Adobe has seen that metric fall to an average of just 10.77% over the past four years.
That resulted in a dramatic drop-off in the company’s net change in cash and equivalents, which fell from $472 million in 2024 to -$2.2 billion in 2025. Still, Adobe has beat earnings expectations for 13 consecutive quarters, and 15 of the last 17 dating back to Q1 FY2022.
But investors have had to endure some pain. Shares of ADBE have dropped around 28% YTD, about 40% over the past year, and more than 50% over the past five years. The stock is virtually flat since the company announced its share repurchase program, but based on analysts’ average 12-month price target, it could see approximately 35% potential upside.
Despite Its Impressive Earnings Streak, ADP Has Yet to Turn a Corner
While a $6 billion share repurchase authorization may pale in comparison to the $25 billion announcements of the other two stocks on this list, New Jersey-based Automatic Data Processing (NASDAQ: ADP) plans to buy back 403 million common shares, or nearly 6% of the company’s shares outstanding.
Since ADP—which provides payroll processing, workforce management, HR, benefits administration, tax, and compliance services software—announced the program on Jan. 14, the stock went on to lose nearly 27% before hitting its YTD low on April 10. Since then, the stock has rallied more than 16%.
That has been welcome news to investors who saw revenue growth fall from a four-year high of nearly 10% in 2022 to just over 7% in 2025. Still, ADP has managed to beat earnings expectations for an impressive 24 consecutive quarters dating back to Q4 FY2020, and 34 out of 35 quarters dating back to Q4 FY2017.
Analysts are maintaining a tepid outlook, though, with the stock receiving a consensus Hold rating and a 12-month price target that implies around 13% potential upside.
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