Pegasystems (PEGA) experienced a sharp pre-market plunge of 8.23% on Wednesday, extending losses from the previous session.
The decline comes despite the company reporting fourth-quarter adjusted earnings and revenue that exceeded analyst expectations, along with issuing full-year 2026 guidance above current consensus estimates. The sell-off appears driven by broader investor concerns about the impact of artificial intelligence on the software sector, specifically the potential for AI agents to disrupt traditional Robotic Process Automation (RPA) solutions like those offered by Pegasystems.
Market analysis suggests that AI agents could render legacy RPA tools obsolete by performing tasks autonomously through APIs rather than mimicking human screen interactions, a shift categorized as facing "AI obsolescence."