Adobe's stock plunged 5.99% in pre-market trading on Tuesday, amid a broad selloff in software stocks.

The decline follows a warning from IBM that corporate spending is shifting toward data-center infrastructure for artificial intelligence, away from software budgets. IBM's announcement triggered a sector-wide rout, with software investors concerned that AI tools capable of automating routine work could pose a threat to the industry.

IBM CEO Arvind Krishna noted that clients are reprioritizing capital expenditure toward servers, storage, and memory purchases to secure supply-constrained AI infrastructure, which has impacted software deals. This shift in spending has raised concerns about the sustainability of software stocks in the current AI-driven market environment.